Abstract. The purpose of this paper is to estimate empirically the effects of a water tax on water use and on the size and stability of the tax revenues. A tax exceeding valueadded tax can be motivated on efficiency grounds when there are environmental external costs of water use and when water is a scarce resource. A household demand function for water is estimated using community level data for 282 (out of 286) Swedish communities studied annually over the period 1980-1992. Static and dynamic demand functions are estimated using panel data methods. The results show a long-run price elasticity of -0.10 in marginal price models and -0.20 in average price models. The findings imply that a tax of 1 Swedish Kronor (SEK) m -3 of water used (corresponding to a 5% increase in the mean average price) would generate -600 million SEK in tax revenues per year when levied on all households in Sweden. The water consumption would, however, only be reduced by -1%.
IntroductionIn 1994 Denmark introduced a tax on water use. The principal motive was to counteract water shortage, which is a frequent and severe problem in Denmark [Skatteministeriet, 1993]. In contrast to its neighbor, Sweden has an abundance of water of good quality. The motives for introducing a tax on water use in Sweden are clearly not as strong as they were in Denmark. Still, there may be environmental reasons for introducing a tax exceeding the current value-added tax (VAT; that is a commodity tax levied on the value added created in each step of the production and distribution process) level also in Sweden. Despite a general abundance of water, and surface water in particular, shortages of groundwater occur on a regional and temporary basis. In addition, a tax on water can be justified on a more general basis to account for external costs of water use currently excluded in the price.The purpose of this paper is to discuss the relevance of a water tax in Sweden and to estimate empirically price elasticities for water in order to determine the effects of a water tax on water use and on the size and stability of the tax revenues. The paper is not concerned with estimations of the size of the environmental cost of water use or the size of an optimal tax. The study focuses on a tax levied on the household sector, although a water tax could be extended to include the industrial sector as well. Industrial demand for water is likely to be more heterogenous than household demand and can therefore be difficult to estimate. Taxing industrial water use is also more complicated since negative effects on the firms' international competitiveness are likely to occur. For the time being we therefore concentrate on the household sector.
Water Use and Pricing of Water in SwedenHouseholds use •60% of the water produced by communal wnter utilities in Sweden, and the remaining part is mainly used To the extent that the price covers the costs it reflects the average cost of producing and distributing water and a major share of the average environmental cost of water use since the...
Clevidipine is a high clearance drug, which is rapidly metabolized to the corresponding inactive acid. The tmax value of the primary metabolite, and a virtually identical value of the initial half-life and the half-life for elimination from the central compartment, indicate that the initial rapid decline of the post-infusion blood levels is mainly due to elimination rather than distribution. The duration of action of clevidipine is short.
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