Measuring Consumption Externalities

Randon, Emanuela (2012) Measuring Consumption Externalities. Bologna: Dipartimento di Scienze economiche - DSE, p. 37. DOI 10.6092/unibo/amsacta/3337. In: Quaderni - Working Paper DSE (840). ISSN 2282-6483.
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Abstract

Estimation and measurement of consumption externalities are still challenging problems in applied research. In this paper, externalities as Nash equilibrium are estimated using consumer demand theory and a large data set. We estimate Nash equilibrium consumption externalities in petrol budget shares of households living in a metropolitan area in UK. The reaction curves are derived from an Almost Ideal Demand System (AIDS) with externalities. A continuous set of ten year cross sections from the Family Expenditure Surveys is used. In each year, income decile cohorts are created. Results of 2SLS with Panel Data are presented after 2SLS estimates with pooling cross sections have been discussed. Results give evidence that the household petrol consumption pattern is explained by income and externality variables. We also suggest that in order to internalise the negative externality effect, households should be taxed independently of household income.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Randon, Emanuela
Keywords
Nash Equilibrium, Externalities, Cross-Sectional Models, Models with Panel Data.
Subjects
ISSN
2282-6483
DOI
Deposit date
12 Jul 2012 08:27
Last modified
03 Oct 2013 07:54
URI

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