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on Microeconomic European Issues |
| By: | Emmanuel Asane-Otoo (University of Oldenburg, Department of Economics); Abigail O. Asare (University of Oldenburg, Department of Economics) |
| Abstract: | This paper examines the impact of energy poverty on subjective well-being in Germany using longitudinal data from the German Socio-Economic Panel (SOEP) over the period 2010–2023. Exploiting within-individual variation, we estimate fixed-effects models using objective, subjective, and composite indicators of energy poverty. Energy poverty is associated with a statistically significant and economically meaningful decline in life satisfaction, even after controlling for income, health status, and household characteristics. The negative association persists among households that are not income-poor, indicating that energy poverty constitutes a distinct dimension of material deprivation. Effects are strongest for subjective and multidimensional indicators, highlighting the importance of perceived energy deprivation and lived experience. Causal mediation analysis suggests that these well-being losses operate primarily through psychological and emotional channels. These findings imply that policies targeting energy affordability and housing efficiency may generate substantial welfare gains beyond income-based support. |
| Keywords: | Energy poverty, Subjective well-being, Energy affordability, Multidimensional poverty, Panel data |
| JEL: | C23 I14 I31 Q48 D63 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:old:dpaper:455 |
| By: | Carmen Camacho (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris); Hannes Tepper (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris) |
| Abstract: | This paper aims to fill the methodological gap in development economics that until now there exists no quantitative tool that allows to prioritize reforms in a systematic nor optimal way. Following the recent debate on the issues Randomized Control Trials (RCTs) have with establishing external validity and general equilibrium effects, this paper proposes a micro-founded Growth Diagnostics framework to consider general equilibrium effects and prioritize policy prescriptions. Building conceptually on Hausmann et al. (2005), we set up two continuous-time Overlapping Generations (OLG) models to obtain the private and social net-marginal valuations of economic activities as measured by their shadow values. With these in hand, we define the wedges in the net-marginal private and social valuations to set up a new planner problem (the super policy maker problem), where the planner minimizes an aggregate function of disagreement as measured by the wedges. We illustrate our frame-work with an application to the literature on structural change. Worth noting, the final wrapping optimization problem allows to prioritize optimally economic reforms in a second-best framework, thus, to put it in the words of Rodrik (2010), to first diagnose before one prescribes the remedy. |
| Keywords: | Reform, Economic policy, Structural change, General equilibrium |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:hal:cesptp:halshs-04005785 |
| By: | Simon Briole (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier); Marc Gurgand (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris); Éric Maurin (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris); Sandra Mcnally (UNIS - University of Surrey); Jenifer Ruiz-Valenzuela (UB - Universitat de Barcelona); Daniel Santín (UCM - Universidad Complutense de Madrid = Complutense University of Madrid [Madrid]) |
| Abstract: | This paper shows that schools can foster the transmission of civic virtues by helping students to develop concrete, democratically chosen, collective projects. We draw on an RCT implemented in 200 middle schools in three countries. The program leads students to conduct citizenship projects in their communities under the supervision of teachers trained in the intervention. The intervention caused a decline in absenteeism and disciplinary sanctions at school, alongside improved academic achievement. It also led students to diversify their friendship network. The program has stronger effects when implemented by teachers who are initially more involved in the life of the school. |
| Keywords: | citizenship, education, teaching practices, project-based learning, RCT, youth |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05544282 |
| By: | Bernhard, Sarah (IAB Nürnberg); Bohmann, Sandra (DIW Berlin); Fiedler, Susann (WU Wien); Kasy, Maximilian; Schupp, Jürgen (DIW Berlin); Schwerter, Frederik (Frankfurt School of Finance and Management) |
| Abstract: | How does basic income (a regular, unconditional, guaranteed cash transfer) impact labor supply? We show that in search models of the labor market with income effects, this impact is theoretically ambiguous: Employment and job durations might increase or decrease, match surplus might be shifted to workers or employers, and worker surplus might be reallocated between wages and job amenities. We thus turn to empirical evidence to study this impact. We conducted a pre-registered RCT in Germany, starting 2021, where recipients received 1200 Euro/month for three years. We draw on both administrative and survey data, and find no extensive margin (employment) response, and no impact on on job transitions from either non-employment or employment. We do find a small statistically insignificant intensive margin shift to parttime employment, which implies an excess burden (reduction of government revenues) of ca 7.5% of the transfer. We furthermore observe a small increase of enrolment in training or education. |
| Keywords: | BASIC INCOME, RANDOMIZED CONTROLLED TRIAL, LABOR SUPPLY |
| JEL: | I38 J22 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:amz:wpaper:2026-08 |
| By: | Etienne Farvaque; Jean-Baptiste Gossé; Camille Jehle |
| Abstract: | Households across European Union regions face diverse economic shocks impacting wage income and welfare. Understanding the channels through which households adjust their income is crucial for assessing regional resilience. Here we analyze regional (NUTS2) data from 2000 to 2020, decomposing income smoothing into public transfers, property income, self-employment and housing income, and demographic changes. We find that approximately 30% of wage shocks are smoothed in the EU, rising to more than 40% in the euro area and 60% in Western Europe, with transfers and self-employment/housing income as the primary adjustment mechanisms. Property income plays a strong role in Western Europe, particularly during recessions, while migration contributes modestly but significantly to smoothing in Southern and Western Europe. Our analysis reveals distinct regional patterns, delineating core, semi-peripheral, and peripheral groups with varying smoothing capacities. These findings highlight substantial regional heterogeneity in income adjustment, underscoring the multi-speed nature of economic integration and the importance of tailored policies to enhance household resilience across Europe. |
| Keywords: | Risk-Sharing, Income Smoothing, Currency Unions, Migration |
| JEL: | C32 E31 E32 E44 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:banfra:1037 |
| By: | Yana Gallen; Juanna Schrøter Joensen; Eva Rye Johansen; Gregory F. Veramendi; Juanna Schrøter Joensen |
| Abstract: | We study the labor market impact of unplanned pregnancy among women using long-acting reversible contraceptives to delay pregnancy. While most women successfully delay, some have unplanned pregnancies, providing quasi-random variation in pregnancy timing. Analyzing linked health and labor market data from Sweden, we find that unplanned pregnancies halt women's career progression, resulting in income losses of 19% five years later. We find similar effects of unplanned births among women using short-acting reversible contraceptives. Using pregnancy as an instrument for birth in a dynamic treatment effect framework, effects of unplanned children are more detrimental for younger women and those enrolled in education. |
| Keywords: | labor market costs of motherhood, fertility, contraceptives, unplanned pregnancy |
| JEL: | J13 J22 J24 J31 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12586 |
| By: | Klein, Gordon J.; Klotz, Phil-Adrian; Paha, Johannes |
| Abstract: | This study provides an empirical assessment of whether competition stimulates infrastructure investment within network industries – an issue that remains unresolved through theoretical approaches alone. We examine this question in the context of fiber-optic broadband deployment by internet service providers in Germany, a sector that has drawn regulatory scrutiny amid concerns that incumbent firms engage in strategic duplication of infrastructure to deter market entry. To this end, we construct a novel dataset by applying text mining techniques to systematically extract information on fiber infrastructure duplication from newspaper reports. Employing econometric methods, we estimate the causal impact of competition on investment behavior. Contrary to the expectation that competition may spur infrastructure expansion, our findings indicate that competitive pressure is associated with a deceleration in fiber network rollout. |
| Keywords: | Fiber Rollout, Infrastructure Competition, Telecommunication |
| JEL: | D22 L52 L86 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:atv:wpaper:2601 |
| By: | Pulito, Giuseppe (ROCKWOOL Foundation Berlin); Pytlikova, Mariola (CERGE-EI, Charles University and the Economics Institute of the Czech Academy of Sciences, and AIAS, Aarhus University); Schroede, Sarah (Aarhus University and Ratio Institute); Lodefalk, Magnus (Örebro University School of Business) |
| Abstract: | Using two waves of nationally representative Danish firm surveys linked to employer– employee administrative registers, we study how adoption varies across artificial intelligence (AI) and related advanced technologies. We show that AI adoption is highly technologyspecific. While firm size and digital infrastructure predict adoption broadly, workforce composition operates through distinct channels: STEM-educated workforces predict core AI adoption, whereas non-STEM university-educated workforces are associated with generative AI adoption, indicating different human capital complementarities. The factors associated with adoption differ from those predicting deployment breadth: firm size and digital maturity matter for both, whereas workforce composition primarily predicts adoption alone. Machine learning and natural language processing are deployed across multiple business functions, whereas other advanced technologies remain concentrated in specific operational domains. Individual-level evidence provides a foundation for these patterns, with awareness of workplace AI usage concentrated among managers and high-skilled workers. Self-reported AI knowledge is higher among younger and more educated individuals. Finally, commonly used occupational AI exposure measures vary substantially in their ability to predict observed adoption, with benchmark-based measures outperforming patent-based and LLM-focused alternatives. These findings show that treating AI as a monolithic category obscures economically meaningful variation in who adopts, what they deploy, and how well existing measures capture it. |
| Keywords: | Artificial Intelligence; Technology Adoption; Digitalisation; Human capital; AI Exposure Measures. |
| JEL: | D24 J23 J62 O33 |
| Date: | 2026–03–27 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:oruesi:2026_003 |
| By: | Ryan Kim; Justin H. Leung; Ariel Weinberger |
| Abstract: | This paper investigates how immigration affects consumer prices. Using scanner data and instrumenting county-level immigration with historical ancestry patterns, we find that an inflow of 10, 000 immigrants lowers four-year price growth by 0.58 percentage points. Leveraging variation in firm exposure through sales versus production locations, we show price declines stem entirely from the product demand channel: firms lower prices in response to immigrants in sales markets, not production locations. Evidence suggests that immigrants search more intensively, exhibit higher demand elasticity, pay lower prices for identical products, and shift expenditure toward lower-appeal products — consistent with a model of heterogeneous price sensitivity. |
| Keywords: | immigration, consumer prices, search, demand elasticity |
| JEL: | F22 E31 L11 J61 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12588 |
| By: | Guillermo Prieto-Viertel; Carsten K\"allner; Elma Dervic; Ola Ali; Andrea Vismara; Rafael Prieto-Curiel |
| Abstract: | Political discourse attributes the pressure on European welfare systems to foreign nationals. Yet projections of service demand rarely disaggregate service demand by citizenship status. We develop a structural demographic model and project healthcare, education, and housing demand in Austria through 2050, disaggregated by citizenship status and regions across migration scenarios. We find that migration, ageing, and fertility shape each sector differently. In healthcare, the ageing of Austrian nationals contributes 4.7 times more to demand growth than immigration, with the most acute pressures in rural, low-migration regions. In housing, migration accounts for the entire net growth in demand, concentrated in metropolitan hubs. In education, aggregate demand contracts regardless of migration assumptions, whereas future needs are driven more by the births of foreigners in Austria than by new arrivals. Foreign nationals consume services in proportion to their demographic weight, with deviations explained by age structure rather than over-utilisation. These results show that the drivers of service demand are sector-specific: migration restrictions could ease housing pressure, but would not address ageing-driven healthcare demand and may accelerate contraction in the education system. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.26525 |
| By: | Lübker, Malte; Schulten, Thorsten |
| Abstract: | In recent years, minimum wage policy in Europe has undergone a profound change: Many EU countries have raised their minimum wages above average and focused on the goal of ensuring an adequate standard of living. A consolidation of the new course is now emerging, as EU countries are now increasingly basing their minimum wage calculations on reference values as recommended in the European Minimum Wage Directive. The Directive was recently found to be fundamentally in compliance with European law by the European Court of Justice. In Germany, the Minimum Wage Commission has significantly increased the minimum wage and is now pursuing the goal of reaching 60% of the median wage. However, as the reference value has not yet been enshrined in law, progress in this country is still on shaky ground. |
| Abstract: | In den vergangenen Jahren hat die Mindestlohnpolitik in Europa einen tiefgreifenden Wandel erlebt: Die Mindestlöhne wurden deutlich angehoben und auf das Ziel ausgerichtet, einen angemessenen Lebensstandard zu sichern. Inzwischen zeichnet sich eine Konsolidierung des neuen Kurses ab: Viele EU-Staaten orientieren sich bei der Bemessung der Mindestlohnhöhe mittlerweile an Referenzwerten, wie sie in der Europäischen Mindestlohnrichtline empfohlen werden, die unlängst vom Europäischen Gerichtshof für grundsätzlich europarechtskonform erklärt wurde. In Deutschland hat die Mindestlohnkommission den Mindestlohn deutlich erhöht und verfolgt nun das Ziel, 60% des Medianlohns zu erreichen. Da eine gesetzliche Verankerung des Referenzwerts noch aussteht, steht der Fortschritt hierzulande allerdings auf tönernen Füßen. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:wsirep:339641 |
| By: | Lübker, Malte; Schulten, Thorsten |
| Abstract: | In den vergangenen Jahren hat die Mindestlohnpolitik in Europa einen tiefgreifenden Wandel erlebt: Die Mindestlöhne wurden deutlich angehoben und auf das Ziel ausgerichtet, einen angemessenen Lebensstandard zu sichern. Inzwischen zeichnet sich eine Konsolidierung des neuen Kurses ab: Viele EU-Staaten orientieren sich bei der Bemessung der Mindestlohnhöhe mittlerweile an Referenzwerten, wie sie in der Europäischen Mindestlohnrichtline empfohlen werden, die unlängst vom Europäischen Gerichtshof für grundsätzlich europarechtskonform erklärt wurde. In Deutschland hat die Mindestlohnkommission den Mindestlohn deutlich erhöht und verfolgt nun das Ziel, 60% des Medianlohns zu erreichen. Da eine gesetzliche Verankerung des Referenzwerts noch aussteht, steht der Fortschritt hierzulande allerdings auf tönernen Füßen. |
| Abstract: | In recent years, minimum wage policy in Europe has undergone a profound change: Many EU countries have raised their minimum wages above average and focused on the goal of ensuring an adequate standard of living. A consolidation of the new course is now emerging, as EU countries are now increasingly basing their minimum wage calculations on reference values as recommended in the European Minimum Wage Directive. The Directive was recently found to be fundamentally in compliance with European law by the European Court of Justice. In Germany, the Minimum Wage Commission has significantly increased the minimum wage and is now pursuing the goal of reaching 60% of the median wage. However, as the reference value has not yet been enshrined in law, progress in this country is still on shaky ground. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:wsirep:339640 |
| By: | Baraldi, Anna Laura; Cantabene, Claudia; De Iudicibus, Alessandro |
| Abstract: | Governments increasingly rely on purchase incentives for electric and hybrid vehicles to address both climate change and local air pollution. This paper provides new causal evidence on the environmental effectiveness of sub-national vehicle purchase incentives in Italy. Exploiting rich spatial and temporal variation in regional and municipal policies across Italian provincial capitals between 2013 and 2023, we show that the introduction of purchase incentives leads to statistically and economically significant reductions in traffic-related air pollution, measured by maximum annual concentrations of nitrogen dioxide (NO2). These effects are robust across multiple specifications and placebo tests and are primarily driven by direct cash subsidies, while purely fiscal incentives do not generate detectable improvements in air quality. To uncover the underlying mechanisms, we document that incentives substantially increase the adoption of electric and hybrid vehicles and accelerate the phase-out of diesel cars, having an effect on investment in active mobility infrastructure and on changes in selected forms of electric micro-mobility. A decomposition exercise shows that technological substitution within the vehicle fleet is the main channel through which incentives reduce NO2 concentrations. Overall, the results highlight the importance of incentive design and provide policy-relevant evidence on the role of demand-side policies in improving urban air quality. |
| Keywords: | Vehicle purchase incentives, Urban air pollution, Electric and hybrid vehicles, Difference-in-differences |
| JEL: | H2 H20 Q4 |
| Date: | 2026–01–20 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127835 |
| By: | Rupieper, Li Kathrin Kaja (Leibniz University Hannover); Thomsen, Stephan (Leibniz University of Hannover) |
| Abstract: | Lifelong learning is increasingly recognized as important for individual well-being, but causal evidence on this relationship remains scarce. This paper evaluates the effects of non-formal adult education on life satisfaction by exploiting the substantial expansion of courses at East German Volkshochschulen (VHS) following reunification. Combining individual well-being data from SOEP with administrative VHS data, we use quasi-random variation in individuals’ exposure to courses to identify intention-to-treat effects. Estimation results denote small but significant and robust effects of VHS education on life satisfaction. Calculations of average treatment-on-the-treated effects suggest considerably stronger impacts among actual course participants. We furthermore reveal effect heterogeneity across demographic groups. In contrast to formal education, which is commonly found to raise aspirations, we find no corresponding effect of VHS education. Overall, our findings suggest that non-formal courses and training provide an easily accessible, low-cost means of adaptation in times of transformation. |
| Keywords: | Volkshochschule, adult education, transformation, SOEP, Germany, subjective well-being, natural experiment |
| JEL: | H52 I26 I31 N34 P29 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18474 |
| By: | Moïse Drabo; Raquel Fonseca; Marie-Louise Leroux |
| Abstract: | Informal care is a cornerstone of long-term care for older adults but may entail substantial psychological costs for caregivers. Using seven waves (2004–2022) of the Survey of Health, Ageing and Retirement in Europe (SHARE) for 27 countries, we estimate the causal effect of providing regular personal care inside the household on depressive symptoms and quality of life. We estimate dynamic panel instrumental-variable (IV) models with country and wave fixed effects, exploiting the persistence of caregiving and using lagged indicators of caregiving provision as instruments to address reverse causality and unobserved heterogeneity. Our baseline estimates indicate that providing informal care increases depressive symptoms by about 25% and reduces quality of life by roughly 6% relative to non-caregivers. These adverse effects are strongest for spousal caregivers and when caregiving is sustained over time, and they persist even after caregiving ends. Robustness checks using alternative outcomes, subsamples, and specifications suggest that the well-being costs of informal caregiving are sizable and pervasive, underscoring the need for long-term care policies that explicitly account for the mental health burden placed on family caregivers. Les soins informels constituent un pilier de la prise en charge à long terme des personnes âgées, mais peuvent engendrer des coûts psychologiques importants pour les aidants. À partir de sept vagues (2004-2022) de l’enquête sur la santé, le vieillissement et la retraite en Europe (SHARE) menée dans 27 pays, nous estimons l’effet causal de la fourniture régulière de soins personnels à domicile sur les symptômes dépressifs et la qualité de vie. Nous estimons des modèles dynamiques de panel à variables instrumentales (VI) avec effets fixes pays et vague, en exploitant la persistance des soins et en utilisant des indicateurs décalés de la fourniture de soins comme instruments pour traiter la causalité inverse et l’hétérogénéité non observée. Nos estimations de base indiquent que la fourniture de soins informels augmente les symptômes dépressifs d’environ 25 % et réduit la qualité de vie d’environ 6 % par rapport aux personnes ne fournissant pas de soins. Ces effets néfastes sont plus marqués chez les conjoints aidants et lorsque les soins sont prodigués de manière prolongée ; ils persistent même après la fin des soins. Des tests de robustesse utilisant des résultats alternatifs, des sous-échantillons et des spécifications suggèrent que les coûts en matière de bien-être liés aux soins informels sont considérables et généralisés, soulignent la nécessité de politiques de soins de longue durée qui tiennent explicitement compte du fardeau de santé mentale représentant les aidants familiaux. |
| Keywords: | Informal care, Depressive symptoms, Long-term care, Quality of life, Soins informels, Symptômes dépressifs, Soins de longue durée, Qualité de vie, Personnes âgées |
| JEL: | I12 J14 J22 C33 H55 |
| Date: | 2026–03–30 |
| URL: | https://d.repec.org/n?u=RePEc:cir:cirwor:2026s-04 |
| By: | Antoine Teixeira (ADEME - Agence de l'Environnement et de la Maîtrise de l'Énergie); Fanny Vicard (ADEME - Agence de l'Environnement et de la Maîtrise de l'Énergie) |
| Abstract: | European climate policies largely target territorial emissions, overlooking greenhouse gas (GHG) emissions and raw materials embodied in international trade. This study quantifies the potential and limitations of a sufficiency-oriented national strategy to reduce these impacts from a consumption-based perspective. Using the MatMat Environmentally Extended Input-Output (EEIO) model, we assess France's transition pathways toward Net Zero Emissions (NZE) by 2050 under two scenarios: an Efficiency-driven (Eff.) and a Sufficiency-oriented (Suff.) one. Results show that sufficiency systematically outperforms efficiency by reducing both GHG emissions (-44% vs. -31%) and raw material extraction (-24% vs -4%). Its outperformance stems from its stronger ability to reduce import dependency and to shift demand towards less material-intensive production. Housing, mobility, and food drive most reductions, while final services remain a persistent blind spot. In 2050, about twothirds of France's consumption-based impacts remain embodied in imports, 75% of which originate outside the EU, limiting the leverage of European decarbonization policies. These findings highlight the upstream mitigation potential of sufficiency and the need to extend NZE strategies beyond territorial scopes. Two key implications emerge. First, extending sufficiency to service provision is crucial to limit rebound effects and address the growing role of services in ageing societies. Second, integrating sufficiency into coordinated EU-level trade, industrial, and resource policies is essential to tackle imported pressures and strengthen the resilience of low-carbon transitions. |
| Keywords: | Sufficiency, Consumption-based GHG emissions and raw materials, Net-Zero emissions strategies, Scenarios analysis, Input-Output analysis, Industrial ecology |
| Date: | 2026–03–20 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05561584 |
| By: | Ertian Chen; Lichao Chen; Lars Nesheim |
| Abstract: | The European Union Emissions Trading System is set to substantially increase the effective carbon price faced by airlines. To quantify the impact of this carbon regulation on the European airline industry, we estimate a two-stage model of airline competition with endogenous route entry, flight frequencies, and pricing using European data on market shares and prices. Counterfactual simulations reveal that the impacts of carbon pricing are highly asymmetric across carrier types and market segments. Consumer surplus declines by up to 25% overall, with medium-haul markets bearing the brunt at up to 90%, while short-haul markets experience positive net welfare gains (including carbon revenue and the social value of avoided emissions) as airlines reallocate capacity toward shorter routes. We find that airline profits decline by 8–45% across scenarios, while carbon tax revenue of $0.9–3.1 billion and a social value of avoided CO2 emissions of $0.5–1.4 billion partially offset the welfare losses. We also show that a hypothetical Wizz Air–Ryanair merger primarily benefits firm profits through network expansion synergies. |
| Date: | 2026–03–30 |
| URL: | https://d.repec.org/n?u=RePEc:azt:cemmap:04/26 |