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Energy Tax Reform and Poverty Alleviation in Mexico

Author

Listed:
  • José M. Labeaga
  • Xavier Labandeira
  • Xiral López-Otero

Abstract

Equity and efficiency are crucial issues behind any tax reform, but they are particularly relevant in countries with high inequality and large shares of poverty. This paper provides a comprehensive socio-economic empirical assessment of Mexico’s recently implemented tax reforms in the energy domain, and of a hypothetical (partial) removal of existing electricity subsidies. Using the rich National Household Income and Expenditure Survey within the context of a demand system adjustment of non-durable goods, this article provides the publicrevenue, environmental and distributional impacts from the simulation of different combinations of energy taxation, subsidyremoval and distributive offsets.

Suggested Citation

  • José M. Labeaga & Xavier Labandeira & Xiral López-Otero, 2018. "Energy Tax Reform and Poverty Alleviation in Mexico," Working Papers 1801, Universidade de Vigo, Departamento de Economía Aplicada.
    • Handle: RePEc:vig:wpaper:1801
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    More about this item

    Keywords

    Distribution; equity; emissions; subsidy;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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