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Dual Objectives in Taxation Policy - A Study of the Swedish Airline Tax and its Effects

Linde, John LU (2018) NEKH02 20181
Department of Economics
Abstract
This thesis examines the recently implemented Swedish airline tax. It focuses on two areas surrounding the tax. The first being the dual objectives of increasing efficiency by internalizing the climate externality of aviation and reducing emissions to aid in the completion of Swedish climate goals. The second being the effect of the tax in relation to those objectives. Elasticity estimates for air travel demand are estimated using regression analysis, which are used along with other elasticity estimations to predict the consequence of the tax on demand and emission reduction. The results of the thesis show a clear drop in expected demand and emissions, indicating that the airline tax will be at least partly successful in its objective to... (More)
This thesis examines the recently implemented Swedish airline tax. It focuses on two areas surrounding the tax. The first being the dual objectives of increasing efficiency by internalizing the climate externality of aviation and reducing emissions to aid in the completion of Swedish climate goals. The second being the effect of the tax in relation to those objectives. Elasticity estimates for air travel demand are estimated using regression analysis, which are used along with other elasticity estimations to predict the consequence of the tax on demand and emission reduction. The results of the thesis show a clear drop in expected demand and emissions, indicating that the airline tax will be at least partly successful in its objective to reduce emissions. The tax will not be successful in internalizing the climate externality completely due to a low tax rate but will increase efficiency. The dual objectives are concluded to contain some intrinsic conflict since the goals of efficiency and emission reduction does not always coincide. Efficiency appears to have both practical and normative problems as an objective but choosing a target for emission reduction is difficult and prone to similar issues. (Less)
Popular Abstract
This thesis examines the recently implemented Swedish airline tax. It focuses on two areas surrounding the tax. The first being the dual objectives of increasing efficiency by internalizing the climate externality of aviation and reducing emissions to aid in the completion of Swedish climate goals. The second being the effect of the tax in relation to those objectives. Elasticity estimates for air travel demand are estimated using regression analysis, which are used along with other elasticity estimations to predict the consequence of the tax on demand and emission reduction. The results of the thesis show a clear drop in expected demand and emissions, indicating that the airline tax will be at least partly successful in its objective to... (More)
This thesis examines the recently implemented Swedish airline tax. It focuses on two areas surrounding the tax. The first being the dual objectives of increasing efficiency by internalizing the climate externality of aviation and reducing emissions to aid in the completion of Swedish climate goals. The second being the effect of the tax in relation to those objectives. Elasticity estimates for air travel demand are estimated using regression analysis, which are used along with other elasticity estimations to predict the consequence of the tax on demand and emission reduction. The results of the thesis show a clear drop in expected demand and emissions, indicating that the airline tax will be at least partly successful in its objective to reduce emissions. The tax will not be successful in internalizing the climate externality completely due to a low tax rate but will increase efficiency. The dual objectives are concluded to contain some intrinsic conflict since the goals of efficiency and emission reduction does not always coincide. Efficiency appears to have both practical and normative problems as an objective but choosing a target for emission reduction is difficult and prone to similar issues. (Less)
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author
Linde, John LU
supervisor
organization
course
NEKH02 20181
year
type
M2 - Bachelor Degree
subject
keywords
Aviation Taxation Rationality Efficiency Climate
language
English
id
8948266
date added to LUP
2018-07-05 11:24:04
date last changed
2018-07-05 11:24:04
@misc{8948266,
  abstract     = {This thesis examines the recently implemented Swedish airline tax. It focuses on two areas surrounding the tax. The first being the dual objectives of increasing efficiency by internalizing the climate externality of aviation and reducing emissions to aid in the completion of Swedish climate goals. The second being the effect of the tax in relation to those objectives. Elasticity estimates for air travel demand are estimated using regression analysis, which are used along with other elasticity estimations to predict the consequence of the tax on demand and emission reduction. The results of the thesis show a clear drop in expected demand and emissions, indicating that the airline tax will be at least partly successful in its objective to reduce emissions. The tax will not be successful in internalizing the climate externality completely due to a low tax rate but will increase efficiency. The dual objectives are concluded to contain some intrinsic conflict since the goals of efficiency and emission reduction does not always coincide. Efficiency appears to have both practical and normative problems as an objective but choosing a target for emission reduction is difficult and prone to similar issues.},
  author       = {Linde, John},
  keyword      = {Aviation Taxation Rationality Efficiency Climate},
  language     = {eng},
  note         = {Student Paper},
  title        = {Dual Objectives in Taxation Policy - A Study of the Swedish Airline Tax and its Effects},
  year         = {2018},
}