Regional economic analysis of energy-pricing and - taxation policies
Virtually all forecasting models of energy demand at the state level do not explicitly consider the interactions between energy demand and the level of economic activity. The objective of this study is to develop an analytical framework for understanding the nature and extent of these interactions. This framework is then used to evaluate five specific energy pricing and taxation policies for New York State. A 5-component econometric model is developed. The study presents a detailed analysis of the predictive performance of the econometric model. The main result is that the fit of the model is quite good. The first two policies focus on the timing of natural-gas deregulation. The difference in the aggregate product, income, and employment impacts between gradual versus rapid decontrol are relatively insignificant for New York State. Both policies reduce employment, income, and output. Rapid decontrol results in greater reductions in these aggregates. The relatively small effects of deregulation reflect the fact that natural gas is a relatively unimportant fuel in New York State. The three other policies include marginal-cost pricing for electricity, cost-of-service industrial electricity pricing, and a motor-fuel tax each with appropriate revenue reallocation schemes. The simulation results indicate that these policies increase allocative efficiency and improve the terms of trade. The favorable trade effects increase state income and final demand.
- OSTI ID:
- 7092674
- Resource Relation:
- Other Information: Thesis (Ph. D.)
- Country of Publication:
- United States
- Language:
- English
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