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A possible role for discriminatory fuel duty in reducing the emissions from road transport: Some UK evidence

Author

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  • David C Broadstock

    (Research Institute of Economics and Management (RIEM), Southwestern University of Finance and Economics, Sichuan, China and Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey, UK.)

  • Xun Chen

    (Research Institute of Economics and Management (RIEM), Southwestern University of Finance and Economics, Sichuan, China)

Abstract

In this paper it is shown that the relative demands for UK Gasoline and Diesel fuels are price responsive. Given differing emissions based externalities from these two fuel types, it is contended that discriminatory fuel duty might be a means to reduce these externalities. Results are derived from an Almost Ideal Demand System with time varying technological progress, estimated using a bootstrap procedure given non-normalities and relative small sample sizes.

Suggested Citation

  • David C Broadstock & Xun Chen, 2012. "A possible role for discriminatory fuel duty in reducing the emissions from road transport: Some UK evidence," Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) 136, Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey.
    • Handle: RePEc:sur:seedps:136
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    File URL: https://repec.som.surrey.ac.uk/seeds/SEEDS136.pdf
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    References listed on IDEAS

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    1. Li, Gang & Song, Haiyan & Witt, Stephen F., 2006. "Time varying parameter and fixed parameter linear AIDS: An application to tourism demand forecasting," International Journal of Forecasting, Elsevier, vol. 22(1), pages 57-71.
    2. Maria De Mello & Alan Pack & M. Thea Sinclair, 2002. "A system of equations model of UK tourism demand in neighbouring countries," Applied Economics, Taylor & Francis Journals, vol. 34(4), pages 509-521.
    3. Adolf Buse, 1994. "Evaluating the Linearized Almost Ideal Demand System," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(4), pages 781-793.
    4. repec:cup:cbooks:9780521835954 is not listed on IDEAS
    5. I. A. Moosa & J. L. Baxter, 2002. "Modelling the trend and seasonals within an AIDS model of the demand for alcoholic beverages in the United Kingdom," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 17(2), pages 95-106.
    6. Yohe, Gary W., 1979. "Taxing consumption to finance reduced emissions : An alternative pollution control," Economics Letters, Elsevier, vol. 2(1), pages 1-4.
    7. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Alptekin, Aynur & Broadstock, David C. & Chen, Xiaoqi & Wang, Dong, 2019. "Time-varying parameter energy demand functions: Benchmarking state-space methods against rolling-regressions," Energy Economics, Elsevier, vol. 82(C), pages 26-41.
    2. Orkhan Nadirov & Jana Vychytilová & Bruce Dehning, 2020. "Carbon Taxes and the Composition of New Passenger Car Sales in Europe," Energies, MDPI, vol. 13(18), pages 1-15, September.

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    More about this item

    Keywords

    AIDS model; technology biases; time-varying parameter.;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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