Korean Energy Economic Review ISSN:1599-7057(Print) 에너지경제연구

This paper estimates the demographic characteristics and demand function of kerosene users, and analyzed the impact of carbon tax on household. For this, we used NaSTaB household panel data from 2011 to 2020, adopted a logit panel model and a correlated random effect tobit panel model, and the micro-simulation technique. The results shows that the characteristics of housing had a direct correlation with whether or not kerosene was consumed, and income seemed to have an indirect effect rather than a direct effect. The price elasticity and income elasticity of kerosene were estimated to be -1.63 and 0.05, respectively. In particular, price elasticity was inelastic in the low-income class and became more and more elastic toward the higher-income classes. As for the effects of a carbon tax, this paper found that the consumption and carbon emission of kerosene decrease in all income classes as the tax rate increases. But the higher-income classes reduce consumption relatively more, resulting in regressiveness in which the carbon tax burden is concentrated on the low-income class. Therefore, if a carbon tax is introduced on kerosene, energy conversion in the high-income class can be expected, however, policies to mitigate income regressivity should be accompanied.