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Please use this identifier to cite or link to this item: https://hdl.handle.net/2445/213385
Flight ticket taxes in Europe: Environmental and economic impact
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We examine the causal impact of flight ticket taxes on airline flights and derived CO2 emissions and analyse its distributional effects between airlines and travellers and within travellers. We use a dataset on flights within Europe at the airline-route level and apply a staggered difference-in-differences approach considering potential bias of the standard two-way fixed effects and the potential distorting effects of heterogeneities between treated and control routes. The main analysis focuses on low-cost airlines because connecting passengers are typically excluded from the tax. We find that flight ticket taxes have a significant overall effect on low-costs airlines supply and derived emissions: ticket taxes reduce the number of flights per airline-route by 12% on average compared to the counterfactual scenario, resulting in a 14% reduction in carbon emissions. In addition, we estimate a pricing equation using a quantile model to identify the cost pass-through rate over the distribution of the fare variable. The burden of the tax is higher for passengers paying low fares, so taxes have a stronger effect on avoidable flights with less added value and a smaller internalization of the total costs of flying.
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BERNARDO, Valeria, FAGEDA, Xavier and TEIXIDÓ-FIGUERAS, Jordi. Flight ticket taxes in Europe: Environmental and economic impact. Transportation Research Part A: Policy and Practice. 2024. Vol. 179, num. 103892. ISSN 0965-8564. [consulted: 8 of October of 2026]. Available at: https://hdl.handle.net/2445/213385