Diesel Price Convergence and Mineral Oil Taxation in Europe

KOF Working Paper No. 182

21 Pages Posted: 10 Dec 2007

See all articles by Axel Dreher

Axel Dreher

Heidelberg University

Tim Krieger

University of Freiburg - Department of Economics

Date Written: December 2007

Abstract

We empirically analyze convergence of European producer and consumer prices for diesel fuel and investigate the role of excise taxation. By comparing the speed of convergence of prices and taxes we find a surprisingly fast speed of convergence for consumer prices. While this can in part be explained by fuel tourism, the main driving force is producer price dynamics. Tax convergence contributes weakly to price convergence, but the overall effect is to slow down consumer relative to producer price convergence.

Keywords: price convergence, diesel, international taxation, European integration, panel unit roots

JEL Classification: F15, H73, Q48, C23

Suggested Citation

Dreher, Axel and Krieger, Tim, Diesel Price Convergence and Mineral Oil Taxation in Europe (December 2007). KOF Working Paper No. 182, Available at SSRN: https://ssrn.com/abstract=1068632 or http://dx.doi.org/10.2139/ssrn.1068632

Axel Dreher (Contact Author)

Heidelberg University ( email )

Grabengasse 1
Heidelberg, 69117
Germany

HOME PAGE: http://www.axel-dreher.de

Tim Krieger

University of Freiburg - Department of Economics ( email )

University of Freiburg
Wilhelmstr. 1b
Freiburg, D-79085
Germany

HOME PAGE: http://www.wguth.uni-freiburg.de

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