Home About Browse Search
Svenska


The Effects of the Swedish Aviation Tax on the Demand and Price of International Air Travel

Stråle, Jonathan (2021). The Effects of the Swedish Aviation Tax on the Demand and Price of International Air Travel. (NL, NJ) > Dept. of Economics, Sveriges lantbruksuniversitet. Working Paper Series / Swedish University of Agricultural Sciences, Department of Economics ; 2021:02
[Report]

[img] PDF
2MB

Abstract

This paper evaluates the effects of the Swedish aviation tax on the price and demand for international air travel using the synthetic control group method. In addition, it estimates the price elasticity of international air travel from Sweden using web-scraped price data and an instrumental variable approach to account for the simultaneity bias in the price and passenger demand relationship. The effects of the tax are bigger than expected, with the effects on passengers increasing over time after the introduction and the effects on the prices starting high and then decreasing. The estimated price elasticity is -0.76, which together with the price effects of the tax accounts for the reduction in international travel the first three quarters after the introduction. The increase in passenger effects while the price effects diminishes indicates that there in addition to the price effect of the tax is a symbol effect that are affecting the behavior of the Swedish travelers. A potential "Greta Thunberg"-effect is also considered, and no direct evidence for such an effect are found. In contrast to other recent papers, no "leakage effect" of the tax, i.e. that passengers avoid the tax by going to neighboring countries, is found.

Authors/Creators:Stråle, Jonathan
Title:The Effects of the Swedish Aviation Tax on the Demand and Price of International Air Travel
Series Name/Journal:Working Paper Series / Swedish University of Agricultural Sciences, Department of Economics
Year of publishing :2021
Number:2021:02
Number of Pages:29
Publisher:Department of Economics, Swedish University of Agricultural Sciences
ISSN:1401-4068
Language:English
Publication Type:Report
Article category:Other scientific
Version:Published version
Full Text Status:Public
Subjects:(A) Swedish standard research categories 2011 > 5 Social Sciences > 502 Economics and Business > Economics
Keywords:Aviation tax, tax effects, synthetic control group method, price elasticity
URN:NBN:urn:nbn:se:slu:epsilon-p-113890
Permanent URL:
http://urn.kb.se/resolve?urn=urn:nbn:se:slu:epsilon-p-113890
ID Code:25617
Faculty:NJ - Fakulteten för naturresurser och jordbruksvetenskap
Department:(NL, NJ) > Dept. of Economics
Deposited By: SLUpub Connector
Deposited On:08 Oct 2021 10:48
Metadata Last Modified:08 Oct 2021 10:51

Repository Staff Only: item control page

Downloads

Downloads per year (since September 2012)

View more statistics

Downloads
Hits