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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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| Published in: | MAGKS - Joint Discussion Paper Series in Economics (Band 39-2022) |
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| Main Authors: | , , |
| Format: | Article |
| Language: | English |
| Published: |
2022
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| Subjects: | |
| Online Access: | PDF Full Text |
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| Summary: | 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. |
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| Physical Description: | 44 Pages |
| ISSN: | 1867-3678 |
| DOI: | 10.17192/es2024.0746 |