Opposing Attitudes Towards Environmental Taxes: A Price Dilemma? A Case of the Swedish Attitudes on Gasoline Emission Taxes

Abstract

This thesis investigates how people’s attitudes toward environmental taxes are shaped and whether changes in end-consumer prices of gasoline have a direct effect on carbon tax perception. A theoretical model is constructed to represent the individual’s choice problem using a utility function. An empirical model is then set up based on the theoretical model and uses cross-sectional survey data between 2011-2020 to analyze people’s attitudes towards environmental taxes using gasoline pump prices and personal characteristics. The results in this thesis suggest a negative relationship between pump prices and public opinion on a carbon tax. We also investigate whether the magnitude of this relationship could differ among population groups, however we find no significant effects. These findings contribute to the field of research on Pigouvian taxes and how to address greenhouse-gas emissions by putting emphasis on prices as an addition to prior determinants, as well as what it means for policy makers aiming to implement such taxes.