Distributional effects of the diesel carbon tax increase across income groups and rural-urban classes (IMAGE)

VATT Institute for Economic Research

Distributional effects of the diesel carbon tax increase across income groups and rural-urban classes

Caption

In the highest-income areas, the 11 euro-cent increase in the carbon tax per diesel liter leads to a price increase of only 7.6 euro-cents, while the corresponding price increase in the lowest-income areas is 9.1 euro-cents. In the most urban areas, the tax increase leads to a price increase of 7.7 euro-cents, while in the most rural areas the tax increase is fully passed on to consumer prices.

Credit

Jarkko Harju, Tuomas Kosonen, Marita Laukkanen, Kimmo Palanne

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