Umeå Economic Studies,
Umeå University, Department of Economics

Abstract: The main objective of this paper is to analyse consumer response due to changes in energy or environmental policy. To achieve the objective we for-mulate and estimate an econometric model for non-durable consumer demand in Sweden that utilises micro- as well as macro-data. The micro-economic model is conditional on male and female labour supply. A 100 percent increase of the Swedish CO2 tax will, according to the simulations, result in an increased tax payment of SEK 630 or 0.7 percent of disposable income for the households with the lowest disposable incomes. The corre-sponding numbers for the richest households are SEK 990 and 0.3 percent.

Keywords: Consumer economics; demand analysis; energy taxation; simulation

JEL-codes: C30; D12; Q41

28 pages, May 20, 1999

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Published as

Runar Brännlund and Jonas Nordström, (2004), 'Carbon Tax Simulations Using a Household Demand Model', European Economic Review, vol 48, pages 211-233

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