distributional effects of a carbon tax in broader u s fiscal reform abstract this paper analyzes the distributional implications of an illustrative 15 carbon tax imposed in 2010 on carbon in fossil fuels we analyze its incidence across income classes and regions both in isolation and when combined with measures that apply the carbon tax revenue to lowering other distortionary taxes in the economy consistent with earlier findings we find that a carbon tax is regressive using tax swap simulations we then subtract the burden of other taxes the carbon tax revenue could displace and compute the net effect on households under three assumptions about how capital and labor income might be distributed

tobacco taxes and regressivity recent literature on tobacco taxation suggests that optimal tax rates should be very high but such high taxes raise concerns over regressivity most econometric estimates of elasticities by income group use historic price data that are low and the usefulness of such estimates is therefore questionable on account of the serious out of sample prediction problem to address that problem this paper estimates price elasticities for different socioeconomic groups using recent canadian survey data for a period during which prices rose to a level of about 7 per pack the results provide little reason to overturn the traditional concerns about regressivity

supply storage and service reliability decisions by gas distribution utilities a chance constrained approach this paper explores the trade offs among purchases storage and service reliability decisions faced by natural gas distribution utilities the short term demand for natural gas fluctuates because of the weather to encourage load leveling the pipeline transmission companies that supply the utilities use a demand contract that charges utilities based on their peak day needs and often charge for a minimum daily purchase requirement whether that purchase is made or not the policy variables available to the utility include increasing its storage capacity and providing interruptible service to some customers thereby lowering reliability of service there are also technological constraints on the maximum storage gas flows to explore these trade offs a chance constrained cost minimization problem is formulated two decision rules for gas purchases and storage operation are examined in these rules an initial decision is made at the beginning of each month about either the level of purchases or the level of

a large scale linear complementarity model of the north american natural gas market abstract the north american natural gas market has seen significant changes recently due to deregulation and restructuring for example third party marketers can contract for transportation and purchase of gas to sell to end users while the intent was a more competitive market the potential for market power exists we analyze this market using a linear complementarity equilibrium model including producers storage and peak gas operators third party marketers and four end use sectors the marketers are depicted as nash cournot players determining supply to meet end use consumption all other players are in perfect competition results based on national petroleum council scenarios are presented

distributional effects of taxing transport fuel this paper1 takes as its starting point the observation that fuel prices and thus taxes are important for good management of climate change and other environmental problems to economists this should be no surprise yet it seems that the role of fuel taxation as an instrument of climate policy has not been fully appreciated it is however one of the few policy instruments that since several decades has actually reduced fuel consumption appreciably thanks to taxation mainly in europe and japan carbon emissions are considerably lower than they would have been otherwise in future where carbon emissions are to be cut drastically this instrument will be crucial there is however much opposition to the instrument this opposition uses various arguments for instance that fuel taxes hurt the poor since they are strongly regressive we however find that the choice of country and methodology turns out to be of great consequence we study seven european countries france germany united kingdom italy serbia spain and sweden and do find some evidence of regressivity but the evidence is very weak it does not apply when lifetime income is used and it does not apply to the poorest country in the group the best one line summary is probably that the tax is approximately proportional

a marginal cost pricing model for gas distribution utilities we develop a natural gas distribution utility pricing model that includes optimization of supply mix and capacity expansion financial analysis of revenue requirements and design of either average cost or marginal cost based rates and apply it using data from the east ohio gas company the results clearly point to the superiority of marginal cost over average cost pricing policies in terms of lesser capital requirements better capacity utilization and higher end use economic efficiency

empirical inference with equilibrium search models of the labour market this paper examines the use of equilibrium search models in the empirical analysis of labour markets we survey the literature on structural estimation of these models with micro data on wages and durations and we discuss the advantages of this approach for policy analysis and for obtaining a better understanding of the labour market during the past ten years substantial progress has been made in terms of the explanatory power of these models we finish with a critical examination of the extent to which the approach can be fruitfully applied to matched worker firm data

a mixed complementarity based equilibrium model of natural gas markets we present a new multiseasonal multiyear natural gas market equilibrium model based on the concept of a competitive equilibrium involving the market participants producers storage reservoir operators peak gas operators pipeline operators marketers and consumers the first three classes are depicted as price takers consistent with perfect competition the pipeline operations are described with regulated tariffs but also involve congestion pricing as a mechanism to allocate scarce pipeline capacity the marketers are price takers in all markets except in sales to consumers in which they compete as nash cournot players finally consumers are described by demand curves for each of the four sectors residential commercial industrial and electric power we show that the equilibrium model is an instance of a mixed nonlinear complementarity problem ncp and provide sufficient detail not generally seen in previous complementarity models of natural gas the ncp formulation is derived from considering the karush kuhn tucker optimality conditions of the optimization problems faced by these participants under mild conditions we show that this ncp has a solution and under additional reasonable conditions we show that the market prices are unique we also validate the model on a representative sample network with nine market participants and three seasons using four scenarios

coal taxation reform in china and its distributional effects on residential consumers abstract there is an ongoing reform in coal taxation in china from a quantity based to a price based approach while the coal tax could play an important role in resource conservation and air pollution reduction its distributional effect is not well studied this paper investigates the distributional effect of china s coal taxes on households before and after the reform we find that about 30 percent of rural households and six percent of urban households are directly affected by the coal taxes and that the directly affected households tend to be poor we also find that provinces are affected differently by the coal taxes the provinces that are more affected tend to have lower household income by the suits index we find that both the quantity based and price based coal taxes are regressive for residential consumers in china and that the coal taxation reform had little effect on the regressivity of the coal tax by simulation we find that the regressivity of the coal tax could be reduced if the tax rate were set to be positively correlated with provincial household income

sources of earnings inequality estimates from an on the job search model of the us labor market since the early 1980s the labor market in the united states has seen a substantial increase in earnings dispersion we study the issue by developing an on the job search model of the us labor market that allows for wage and employment mobility as a result of optimal individual behavior we estimate its structural parameters on psid data at different points in time to clarify the sources of the evolution of earnings inequality and instability between 1987 and 1996 this procedure allows to compute lifetime measure of inequality on top of the usual cross sectional measure of inequality and provide counterfactual experiments that evaluate the contribution of different parameters to changes over time by taking into account some equilibrium effects we find that the increase in lifetime inequality and in cross sectional inequality have been generated by different sources and that these sources are different by skills changes in the wage offer distribution are the main determinant of the increase in inequality for skilled workers while both mobility changes and wage offer distribution changes are needed to explain changes for the unskilled

how to make a carbon tax reform progressive the role of subsistence consumption this letter analyzes the distributional effects of a carbon tax reform when households must consume carbon intensive goods above a subsistence level the reform is progressive if revenues are recycled as uniform lump sum transfers in other cases it is regressive

a stochastic dynamic programming model for scheduling of offshore petroleum fields with resource uncertainty abstract norwegian deliveries of natural gas to europe have grown considerably over the last years additionally plans involve even greater supplies introducing major gas fields as the troll field the market for natural gas may to a large extent be viewed as a contractual market this is normally explained by the big investments involved in development and transport in such a perspective the supplier s planning problem of scheduling fields and pipes may prove important in order to be able to meet contractual agreements this paper describes a model of stochastic dynamic programming type which may be viewed as a first attempt in solving this type of problem the main focus in this model is on project scheduling and resource uncertainty each project s production profile is viewed as a stochastic variable then a possible goal could be to minimize expected deviation from a given predicted contract profile we use the term spsp stochastic project scheduling problem to refer to our problem besides a simplified description of the mathematical model the paper also describes some tests with model examples these examples are constructed to obtain some interesting non intuitive effects the paper concludes with some remarks on complexity and speedup possibilities

multiple equilibria and minimum wages in labor markets with informational frictions and heterogeneous production technologies it is often argued that a mandatory minimum wage is binding only if the wage density displays a spike at it in this article we analyze a model with search frictions and heterogeneous production technologies in which imposition of a minimum wage affects wages even though after imposition the lowest wage in the market exceeds the minimum wage the model has multiple equilibria as a result of the fact that the reservation wage of the unemployed and the lowest production technology in use affect each other imposition of a minimum wage may improve social welfare

natural gas corridors between the eu and its main suppliers simulation results with the dynamic gastale model abstract growth in gas demand poses a challenge for european energy consumers and other gas importing countries in terms of an increasing dependency on gas imports and consequently also supply security this paper focuses on interactions among demand supply and investments in natural gas corridors namely pipeline transport lng and storage facilities affecting the european natural gas market over the period 2005 2030 a number of policy scenarios including a business as usual bau scenario are formulated to study the impact of demand uncertainty and delays in investment on the gas transport infrastructure required in the long run in europe the analyses indicate that substantial investments in gas transport corridors are needed to accommodate imports and seasonal demand variations analysis of scenarios of supply interruption in the form of suddenly reduced import capacity for particular pipeline routes indicates that portions of europe could experience price increases of up to 100 in the case of a year long interruption to accommodate import needs and to mitigate possible disruptions pipeline connections running from east to west need to be given special priority

are co2 taxes regressive evidence from the danish experience abstract denmark today carries one of the heaviest environmental tax burdens in the world bringing in around 10 of public revenues while evaluations have shown that the danish co 2 and other environmental taxes work as an effective measure to reduce emissions a considerable barrier to increased use of these instruments today seems to be a widespread perception of their socially adverse effects in this article it is demonstrated that co 2 taxes imposed on energy consumption in households as well as in industry do in fact tend to be regressive and therefore have undesirable distributional effects this holds especially for taxes imposed directly on households to analyze this we apply national consumer survey statistics in combination with input output tables

distributional effects of carbon taxes the case of mexico abstract in this study i develop an analytical general equilibrium model to assess the distributional effects across income groups of a carbon tax assuming that the revenue from the carbon tax is recycled in two different ways as a manufacturing tax cut and a food subsidy i use this analytical model to provide intuition about the main distributional components the model is calibrated with data from mexico to obtain unambiguous price and quantity changes i find that the distribution of the costs is driven by the way the revenue is recycled in particular the costs are distributed regressively when the revenue is recycled as a manufacturing tax cut and progressively when it is recycled as a food subsidy providing a food subsidy also generates higher welfare and lower carbon emissions than the manufacturing tax cut to compare and test the robustness of the numerical findings for mexico i calibrate the model with data for a developed country specifically the u s a despite differences in the magnitude of the changes in some variables the general findings mentioned above also hold for u s a data these results suggest that as found for the u s a in recent studies carbon taxes are not necessarily regressive rather the way revenue is recycled is a major determinant of how the carbon tax costs are distributed

wage tenure contracts with heterogeneous firms abstract this paper investigates equilibria where firms post wage tenure contracts and risk averse workers search for new job opportunities whether employed or unemployed we generalize previous work by assuming firms have different productivities equilibrium implies more productive firms always offer more desirable contracts thus workers never quit from more productive firms for less productive firms nevertheless turnover is inefficient as employees with long tenures at low productivity firms may reject outside job offers from more productive firms a worker who quits to a more productive firm may accept a wage cut such wage cuts are compensated by faster promotion rates to higher wage levels in the future we also generalize previous arguments by showing equilibria exist where the distribution of offers contains interior mass points and find equilibrium wage tenure contracts need not be smooth

optimizing short term natural gas supply portfolio for electric utility companies natural gas fired power plants ngfpp are important electricity generation resources in the united states optimizing the natural gas supply portfolio especially the short term portfolio is critical for the day to day operations and the financial performance of ngfpps traditionally such optimization problems are solved using cost minimization based frameworks however such frameworks are facing challenges due to the lack of consideration of associated financial risks in the current deregulated electricity markets which the electric utility companies eucs who own and operate ngfpps now bear this paper presents a utility maximization based framework to optimize the short term natural gas supply portfolio for the euc it considers the financial risks associated with the portfolio and incorporates the risk preferences of the eucs as decision maker dm in the portfolio optimization process an application of the proposed framework is provided and its results show that the proposed framework is more desirable in terms of risk cost trade off optimization

measuring labor market frictions a cross country comparison in this paper we define and estimate measures of labor market frictions using data on job durations we compare different estimation methods and different types of data we propose and apply an unconditional inference method that can be applied to aggregate duration data it does not require wage data it is invariant to the way in which wages are determined and it allows workers to care about other job characteristics the empirical analysis focuses on france but we perform separate analyses for the united states of america the united kingdom germany and the netherlands we quantify the monopsony power due to search frictions and we examine the policy effects of the minimum wage unemployment benefits and search frictions jel j63 j64

robust strategies for natural gas procurement abstract in order to serve their customers natural gas local distribution companies ldcs can select from a variety of financial and non financial contracts the present paper is concerned with the choice of an appropriate portfolio of natural gas purchases that would allow a ldc to satisfy its demand with a minimum tradeoff between cost and risk while taking into account risk associated with modeling error we propose two types of strategies for natural gas procurement dynamic strategies model the procurement problem as a mean risk stochastic program with various risk measures naive strategies hedge a fixed fraction of winter demand the hedge is allocated equally between storage futures and options we propose a simulation framework to evaluate the proposed strategies and show that i when the appropriate model for spot prices and its derivatives is used dynamic strategies provide cheaper gas with low risk compared to naive strategies ii in the presence of a modeling error dynamic strategies are unable to control the variance of the procurement cost though they provide cheaper cost on average based on these results we define robust strategies as convex combinations of dynamic and naive strategies the weight of each strategy represents the fraction of demand to be satisfied following this strategy a mean variance problem is then solved to obtain optimal weights and construct an efficient frontier of robust strategies that take advantage of the diversification effect

equilibrium search and tax credit reform an empirical equilibrium job search model with wage posting is developed to analyze the labor market impact of uk tax reforms the model allows for a rich characterization of the labor market with hours responses accurate representations of the tax and transfer system and both worker and firm heterogeneity the model is estimated with pre reform longitudinal survey data using a semi parametric estimation technique and the impact of actual tax reform policies is simulated the model predicts that the british working families tax credit and contemporaneous reforms increased employment with equilibrium effects found to play a relatively minor role

distributional effects of a carbon tax on chinese households a case of shanghai abstract as an effective policy instrument to reduce co 2 emissions the effects of a carbon tax on distribution have been the critical factor in determining whether a carbon tax will be acceptable in china taking shanghai as an example which is the economic center and front runner of china this paper estimates the distributional effect of a carbon tax on households in various income groups by using the input output model and the suits index the results indicate that the comprehensive distributional effect of the carbon tax is regressive the expenditure of the low income group caused by the carbon tax accounts for 0 853 of the total expenditure while that of the high income group 0 712 the direct distributional effect presents a weak progressivity while the indirect one is significantly regressive and the latter is much larger than the former moreover the suits index of the carbon tax is 0 078 implying that the carbon tax burden on the low income group is the highest and thus that a carbon tax can intensify income inequality therefore when introducing a carbon tax some rational associated redistribution or compensation measures such as purposive transfer payments should be implemented to restrict or even eliminate the regressivity of the carbon tax

can carbon taxes be progressive abstract most studies have assessed the distributional impact of carbon taxes through their effects on commodity prices alone while ignoring their impact on individual welfare brought about by changes in factor prices yet the remunerations of capital and labor are not affected by these taxes similarly and their shares in earned incomes are not uniform across households this paper provides a comprehensive analysis of the incidence of carbon taxes on inequality by considering simultaneously the commodity and the income channels we propose a decomposition of the change in individual welfare metrics then we develop a general equilibrium model to assess the impact of carbon taxes on factor and commodity prices and subsequently their distributional impact on households using the lorenz and concentration curves and the gini index our results suggest that changes in factor prices and changes in commodity prices especially those of energy commodities have opposing effects on inequality carbon taxes tend to reduce inequality through the changes in factor prices and tend to increase inequality through the changes in commodity prices hence we find a non monotonic u shaped relationship between carbon taxes and inequality our results suggest that the traditional approach of assessing the impact of carbon taxes on inequality through changes in commodity prices alone may be misleading the findings cast light on the desirability of using both channels in the assessment of carbon taxes on inequality

equilibrium wage tenure contracts in this study we consider a labor market matching model where firms post wage tenure contracts and workers both employed and unemployed search for new job opportunities given workers are risk averse we establish there is a unique equilibrium in the environment considered although firms in the market make different offers in equilibrium all post a wage tenure contract that implies a worker s wage increases smoothly with tenure at the firm as firms make different offers there is job turnover as employed workers move jobs as the opportunity arises this implies the increase in a worker s wage can be due to job to job movements as well as wage tenure effects further there is a nondegenerate equilibrium distribution of initial wage offers that is differentiable on its support except for a mass point at the lowest initial wage we also show that relevant characteristics of the equilibrium can be written as explicit functions of preferences and the other market parameters

taxation of multiple greenhouse gases and the effects on income distribution a case study of the netherlands current economic instruments aimed at climate change mitigation focus on co2 emissions only but the kyoto protocol refers to other greenhouse gases ghg as well as co2 these are ch4 n2o hfcs pfcs and sf6 taxation of multiple greenhouse gases improves the cost effectiveness of climate change mitigation it is not yet clear however what the effect is of multigas taxation on the distribution of the tax burden across income groups this paper examines and compares distributional effects of a co2 tax and a comprehensive tax that covers all six ghg of the kyoto protocol the study concentrates on the netherlands in the year 2000 we established tax rates on the basis of marginal abatement cost curves and the dutch policy target the distributional effects have been determined by means of environmentally extended input output analysis and data on consumer expenditures our results show that taxation of multiple ghg improves not only the cost effectiveness of climate change mitigation but also distributes the tax burden more equally across income groups as compared to a co2 tax these findings are relevant for the debate on the role of non co2 ghg in climate change mitigation

the welfare effects and the distributive impact of carbon taxation on italian households in this work the welfare effects and the distributive impact on italian households of the italian carbon tax are calculated the carbon tax has been introduced in italy at the beginning of 1999 asking for smooth increases over a number of years in the prices of most fossil fuels its welfare effects have been calculated using true cost of living index numbers and the compensating variation the parameters have been obtained through estimation of a complete almost ideal demand system using households data from 1985 to 1996 the welfare loss turns out to be quite substantial and affects italian households in a non negligible way but the distribution of welfare losses across different levels of total monthly expenditures does not allow sustaining the regressivity of carbon taxation as the effect becomes bigger as we move up the income distribution this evidence might encourage the use of carbon taxes at least in the transport sector as cost effective instruments of environmental policy especially after the ratification of the kyoto protocol on climate change