{"title":"The Impact of the Tax Reduction on Fuel Prices in Germany – A Synthetic Difference-in-Differences Approach","authors":"Lea Bernhardt, Xenia Breiderhoff, R. Dewenter","doi":"10.1515/roe-2023-0014","DOIUrl":null,"url":null,"abstract":"Abstract We analyse the impact of the temporary tax reduction on diesel and gasoline prices from June to the end of August 2022 in Germany. By implementing a synthetic difference-in-differences approach with different baskets of European countries, we find a significant reduction in prices by 33.8–34.4 cents per litre for gasoline and 12.2–14.6 cents per litre for diesel. These results are robust to variations of countries as well as different time periods analysed. Therefore, we conclude that the temporary reduction of the tax rate on gasoline and diesel was passed through to consumers by rates of 97 %–99 % for gasoline and 75 %–86 % for diesel, respectively. However, these pass-on rates do not imply a high level of competition. On the contrary, an increase in prices before the introduction of the tax cut and an increase before the end of the discount tend to indicate less intense competition.","PeriodicalId":48456,"journal":{"name":"Review of Economics and Statistics","volume":null,"pages":null},"PeriodicalIF":7.6000,"publicationDate":"2023-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Review of Economics and Statistics","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1515/roe-2023-0014","RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 1
Abstract
Abstract We analyse the impact of the temporary tax reduction on diesel and gasoline prices from June to the end of August 2022 in Germany. By implementing a synthetic difference-in-differences approach with different baskets of European countries, we find a significant reduction in prices by 33.8–34.4 cents per litre for gasoline and 12.2–14.6 cents per litre for diesel. These results are robust to variations of countries as well as different time periods analysed. Therefore, we conclude that the temporary reduction of the tax rate on gasoline and diesel was passed through to consumers by rates of 97 %–99 % for gasoline and 75 %–86 % for diesel, respectively. However, these pass-on rates do not imply a high level of competition. On the contrary, an increase in prices before the introduction of the tax cut and an increase before the end of the discount tend to indicate less intense competition.
期刊介绍:
The Review of Economics and Statistics is a 100-year-old general journal of applied (especially quantitative) economics. Edited at the Harvard Kennedy School, the Review has published some of the most important articles in empirical economics.