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Evaluating the Impacts of the Swedish Aviation Tax

Fors, Sofia LU and Ljung, Beatrice LU (2019) NEKN01 20191
Department of Economics
Abstract
The 1st of April 2018 an aviation tax was implemented in Sweden. With an event study approach this paper aims to provide an understanding of the outcome of the new policy. This by investigating if the tax causes significant effects on the stock returns of concerned flight carriers and whether the policy causes a significant change in the number of air passengers travelling from Sweden. By calculating the expected normal performance using the mean model, the market model and the Holt-Winters model, the abnormal behaviour is established and tested for significance. Previous literature provide insights from aviation taxes implemented in other European countries. A negative impact on concerned flight carriers and a decline in the number of air... (More)
The 1st of April 2018 an aviation tax was implemented in Sweden. With an event study approach this paper aims to provide an understanding of the outcome of the new policy. This by investigating if the tax causes significant effects on the stock returns of concerned flight carriers and whether the policy causes a significant change in the number of air passengers travelling from Sweden. By calculating the expected normal performance using the mean model, the market model and the Holt-Winters model, the abnormal behaviour is established and tested for significance. Previous literature provide insights from aviation taxes implemented in other European countries. A negative impact on concerned flight carriers and a decline in the number of air passengers travelling are mainly concluded. The results of this paper indicate no market reaction related to the introduction of the aviation tax. Significant changes are observed when considering the air passenger data. The tax may be an explanation to the results. Yet, there may be other influencing aspects such as economic and environmental considerations. (Less)
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author
Fors, Sofia LU and Ljung, Beatrice LU
supervisor
organization
course
NEKN01 20191
year
type
H1 - Master's Degree (One Year)
subject
keywords
The Swedish aviation tax, Event study, Market model, Mean model, Holt-Winters model, Price elasticity
language
English
id
8983502
date added to LUP
2019-08-08 10:32:38
date last changed
2019-08-08 10:32:38
@misc{8983502,
  abstract     = {{The 1st of April 2018 an aviation tax was implemented in Sweden. With an event study approach this paper aims to provide an understanding of the outcome of the new policy. This by investigating if the tax causes significant effects on the stock returns of concerned flight carriers and whether the policy causes a significant change in the number of air passengers travelling from Sweden. By calculating the expected normal performance using the mean model, the market model and the Holt-Winters model, the abnormal behaviour is established and tested for significance. Previous literature provide insights from aviation taxes implemented in other European countries. A negative impact on concerned flight carriers and a decline in the number of air passengers travelling are mainly concluded. The results of this paper indicate no market reaction related to the introduction of the aviation tax. Significant changes are observed when considering the air passenger data. The tax may be an explanation to the results. Yet, there may be other influencing aspects such as economic and environmental considerations.}},
  author       = {{Fors, Sofia and Ljung, Beatrice}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Evaluating the Impacts of the Swedish Aviation Tax}},
  year         = {{2019}},
}