Pass-through of Temporary Fuel Tax Reductions: Evidence from Europe

Several European countries have implemented temporarily fuel tax reductions in 2022 to relieve the financial burden on their citizens. This paper provides estimates of the pass-through rates as well as the effect on retail margins for France, Germany and Italy. Using a unique data set containing dai...

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Veröffentlicht in:MAGKS - Joint Discussion Paper Series in Economics (Band 39-2022)
Autoren: Drolsbach, Chiara, Gail, MMauriceaximilian, Klotz, Phil-Andrian
Format: Artikel
Sprache:Englisch
Veröffentlicht: Philipps-Universität Marburg 2022
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Zusammenfassung:Several European countries have implemented temporarily fuel tax reductions in 2022 to relieve the financial burden on their citizens. This paper provides estimates of the pass-through rates as well as the effect on retail margins for France, Germany and Italy. Using a unique data set containing daily consumer prices for gasoline and diesel, we employ a staggered Difference-in-Differences (DiD) design. Our results show a heterogeneous pass-through of the fuel tax reductions depending on the country and on the type of fuel. Nevertheless, we find a full- or even over-shifting of the tax cuts in all three countries. These findings also have important implications for the effective design of unconventional fiscal policy as well as for competition policy in the fuel market.
Umfang:44 Seiten
ISSN:1867-3678
DOI:10.17192/es2024.0746