Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/259763 
Year of Publication: 
2020
Citation: 
[Journal:] Swiss Journal of Economics and Statistics [ISSN:] 2235-6282 [Volume:] 156 [Issue:] 1 [Article No.:] 21 [Publisher:] Springer [Place:] Heidelberg [Year:] 2020 [Pages:] 1-20
Publisher: 
Springer, Heidelberg
Abstract: 
We estimate the effect of an electricity tax on aggregate electricity consumption with the synthetic control method. The tax was introduced in the Swiss city of Basel in 1999 and, together with other tariff changes, increased marginal electricity prices by 5.4-8.0%. We compare the actual and a hypothetical electricity consumption in the years 1999-2006. The latter is a weighted average of electricity consumption in other Swiss cities and captures the hypothetical situation without the tax. We find a statistically insignificant effect of the tax increase of - 2.7 to - 1.9%, which implies a rather small, but not unreasonable, price elasticity of between - 0.5 and - 0.2. Ambiguous effects on average prices and an unfortunate communication by officials may explain why the innovative reform failed to induce a stronger response.
Subjects: 
Electricity tax
Electricity demand
Synthetic control method
JEL: 
H23
Q41
Q48
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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