Working Paper Series, Department Economics, Swedish University of Agricultural Sciences
Distributional effects of environmental meat taxes in Sweden- Can the poor still eat meat?
Abstract: This paper looks at the distributional effect of an
environmental tax on meat in Sweden, if such a tax was to be introduced.
Welfare effects are measured as Compensation Variation (CV) for multiple
price changes where Hicksian cross price elasticities, household
expenditures and price changes are used in the calculations. Results show
that taxes on meat are neutral over households when expenditures on meat
are used as welfare indicators, and regressive if income is used. This can
be explained as households use similar shares of total expenditures on
meat. The households with the smallest income levels need to be compensated
with 950 SEK per person and year to feel that utility is not lowered if
taxes on meat are introduced, and the households with the highest income
levels need to be compensated with 1176 SEK per person and year. This
corresponds to 0.78% and 0.80% of total expenditures for the groups
respectively. Compared to income levels this is 1.04% for the households
with the smallest income levels and 0.52% for the households with the
Keywords: Meat taxes; Distributional effects; Compensating Variation; Sweden; (follow links to similar papers)
JEL-Codes: D12; D60; Q18; Q50; Q58; (follow links to similar papers)
18 pages, February 12, 2015
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