This research programme aims at assessing the fiscal and distributional impacts of energy price measures introduced in many European countries from 2022 onward to mitigate energy price hikes and their effects on households’ incomes.
The main tool of analysis is EUROMOD – the EU tax-benefit microsimulation model - and its indirect tax tool (ITT). Although the ITT was designed to model indirect taxes reforms, the flexibility of the EUROMOD model allows to easily expand its functionality to include modeling of inflation as well as exceptional measures such as price caps, energy bill’s discounts and lump-sum energy transfers.
Combining microsimulation analysis with energy price forecasts allows us to compare the impact of the inflationary shock with and without energy price interventions across the income distribution. We can identify who is more likely to be severely affected by the price shock and evaluate which energy price intervention is more cost efficient in shielding vulnerable households from increasing inequality, losses of purchasing power and increasing risk of income and energy poverty.
Links:
- EU Semester - 2023 Country Report for Austria (see page 5)
- EU Semester - 2023 Country Report for Germany (see pages 6 and 16)
- EU Semester - 2023 Country Report for Netherlands (see page 3)
Team:
