Household transport consumption inequalities and redistributive effects of taxes: A repeated cross-sectional evaluation for France, Denmark and Cyprus
Journal
Transport Policy
Date Issued
November 1, 2014
DOI
10.1016/j.tranpol.2014.08.007
Abstract
We evaluate household transport consumption inequalities in France, Denmark and Cyprus, investigate
their temporal dynamics, and estimate the redistributive effects of taxes on different commodity
categories. Using household-level data from repeated cross-sections of expenditure surveys spanning
long periods, the paper applies a decomposition of the Gini index by expenditure component. The results
highlight the effect of the social diffusion of the car. The relative contribution of vehicle use items (e.g.
fuels, maintenance and repair, parking, and registration) to total expenditure inequality has decreased
over time, thus reflecting the increasingly widespread use of cars. Moreover, fuel taxes have become
regressive, while the progressive character of taxes on the remaining car use commodities has weakened
with time. Taxes on transport goods and services as a whole are progressive. However, this result is
principally due to the progressivity of taxes on car purchases, a progressivity stronger by far in Denmark
where these taxes are so high that car purchase costs can be afforded only by those with high incomes.
These findings underline the necessity of taking into account equity issues when designing policies to
attenuate the environmental impact of cars. Increasing car use costs, notably fuel prices, through an
increase of uniform taxes would be particularly inequitable.
their temporal dynamics, and estimate the redistributive effects of taxes on different commodity
categories. Using household-level data from repeated cross-sections of expenditure surveys spanning
long periods, the paper applies a decomposition of the Gini index by expenditure component. The results
highlight the effect of the social diffusion of the car. The relative contribution of vehicle use items (e.g.
fuels, maintenance and repair, parking, and registration) to total expenditure inequality has decreased
over time, thus reflecting the increasingly widespread use of cars. Moreover, fuel taxes have become
regressive, while the progressive character of taxes on the remaining car use commodities has weakened
with time. Taxes on transport goods and services as a whole are progressive. However, this result is
principally due to the progressivity of taxes on car purchases, a progressivity stronger by far in Denmark
where these taxes are so high that car purchase costs can be afforded only by those with high incomes.
These findings underline the necessity of taking into account equity issues when designing policies to
attenuate the environmental impact of cars. Increasing car use costs, notably fuel prices, through an
increase of uniform taxes would be particularly inequitable.