Abstract
The main trends in the determinants of residential motor fuel consumption during the transition and post-transition period in one former centrally-planned country, the Czech Republic, are examined. We show that passenger car ownership in Czech households has been increasing and that these cars are increasingly equipped with stronger engines. However, the age structure of the fleet has not changed as much. The environmental burden has therefore increased, mainly due to increasing domestic car ownership and the vehicles’ technical attributes. Richer and larger households, households with children, and those living in smaller rather than larger cities are the household segments with larger passenger car penetration, and toward which a policy maker might specifically target a policy aimed at changing transportation patterns. Interestingly enough, expenditures on motor fuel showed less change during the analyzed period 1993–2009, and on average remained relatively the same across all income deciles. Fuel taxation, as measured by the Suits and the Jinonice indexes, was quite even too, and this might lead one to conjecture about an even rather than an uneven effect of further fuel taxation across income deciles. Indeed, utilizing a micro-simulation model embodied with price and income responses of fuel demand as estimated for several household segments, we support this conjecture. However, our conclusion about relatively even distribution of the burden from higher fuel taxation across Czech households does not hold, if we analyze the incidence for household segments as defined according to several transportation-relevant household and housing characteristics. Should certain differences due to higher fuel pricing across household segments appear, the overall effect of quite large fuel price increases would be relatively small and the effect on distribution would not be large either. Identifying a household segment that would be affected relatively more even after recycling revenues, we recommend targeting mitigating measures to households of pensioners and families with children and those living in smaller towns or villages.
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- 1.
The toll was later replaced by a mileage charge for large vehicles used for business.
- 2.
The minimal rates set in EU Directive 2003/96/EC are 359 and 330 Euros per 1,000 l of petrol and diesel respectively. Moreover, recent (2010–2011) Czech rates of tax on petrol and diesel that are 688 Euros, or 513 Euros per toe (assuming 25 CZK per Euro) are already above the minimum rates as proposed in a proposal for Revision of this Directive for the year 2018 (that are set at 460 Euros, or 466 Euros per toe respectively).
- 3.
Emissions are taken from Czech Register of Emission Sources, REZZO and they describe the status in the year 2005.
- 4.
Emissions from stationary sources were regulated by the Air Pollution Act introduced in 1991, which required fulfilling certain emission limits on each large emission source until 1999.
- 5.
During 2000–2001, a first proposal on Environmental Tax Reform (ETR) was based on higher energy taxation with rates as proposed in the so-called ‘Monti Proposal’ (EC 1997). The next proposals being discussed during 2004–2008 relied on higher energy or carbon taxation, using information about unit external costs as quantified by ExternE method. One of the ETR proposals also included a new circulation vehicle tax with a rate based on average carbon intensity (new cars) or engine size (older cars).
- 6.
We compute fuel prices as a weighted average of the price of petrol and of diesel with a ratio of 80:20.
- 7.
Petrol that was used by households cost about 20% more than diesel until 1999, and then about 13% more until 2003. Since then diesel was cheaper only by less than 1%, in some periods it was even slightly more expensive than petrol due to obligations to fulfil a minimum quota on bio-diesel share.
- 8.
The increasing number of households which own or use firm-owned cars over time i8 s also reported in two available individual-level datasets – Household Budget Surveys and EU-SILC (see Table 10.2). In the HBS, and on average, while less than 53% of households owned a car in the early 1990s, there are more than 60% of households with a car after 2001. The share of households with a car is also increasing in EU-SILC data – 59% of households owned a car in 2005 while there are almost 66% such households in 2009. Households that could use a firm-owned car for their family represent only a small portion of the HBS population, about 3% to 4%. Both of these datasets, however, suffer from a lack of consistent information about passenger car ownership over the entire analyzed period. The first, the HBS, reports a number for passenger cars owned by household. However, it uses a quota sampling and some changes in its sampling strategy in 2006 make consistent comparison over time difficult. The second, the EU-SILC, applies random sampling, but its surveys only started in 2005.
- 9.
The Household Budget Survey (HBS) is regularly collected by the Czech Statistical Office and its database includes information about household annual expenses on several hundred consumption items, income from various sources, possession of durable goods, home characteristics and other socio-economic data of household members. Households included in the survey are selected using the non-probability quota sampling technique and the annual samples have on average 2,700 to 3,000 observations. The variable PKOEF reflects how each household is represented in the entire Czech population allowing us to compute aggregate statistics and make country-wide predictions. Our dataset covers the period 1993–2009 and includes more than 46,596 observations.
- 10.
The EU-SILC is an EU-wide survey of family statistics on incomes and living conditions. This survey has been conducted annually by the Czech Statistical Office since 2005 (before this, Microcensus surveys were conducted in 1996 and 2002). Households are selected using random sampling and the size of its samples range between 4,000 and 11,000 households each year. Except housing expenditures, the EU-SILC does not include any information about expenditures of households, or more detailed information about durables such as passenger vehicles.
- 11.
We use HBS data rather to analyze the main determinants of car ownership among Czech households later.
- 12.
The approximation of vehicle age by the year of purchase might underestimate the average age of the fleet, particularly because second-hand cars are usually older than the age given by the year of their purchase.
- 13.
Because only a small share of households owned two cars, and very few three and more, we rely on bivariate logit rather than using a count model or multinomial logit model.
- 14.
- 15.
In a recent version of DASMOD, the welfare changes are approximated by the geometric mean between the Paasche and Laspeyres cost-of-living indices, although these indices can only provide an approximation of theoretically proper measures of welfare changes (see more e.g. Hausman 1981, or Vartia 1983).
- 16.
Detailed description of the model provided, for instance, Ščasný (2011).
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Acknowledgment
This research was supported by the Ministry of Education, Youth and Sports of the Czech Republic, Grant No. 2D06029 ‘Distributional and social effects of structural policies’ funded within the National Research Programme II. The support is gratefully acknowledged. Responsibility for any errors remains with the author.
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Ščasný, M. (2012). Passenger Road Transport During Transition and Post-transition Period: Residential Fuel Consumption and Fuel Taxation in the Czech Republic. In: Zachariadis, T. (eds) Cars and Carbon. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-2123-4_10
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