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4.1 Welfare Changes (continued)

Table 5 – Welfare Changes for Smoking Households
HH Type   $7 $15 $25
HH Type
  $7 $15 $25
1 300 1.06 0.0035 0.89 2.27 0.0076 1.91 3.76 0.0125 3.17
600 1.95 0.0032 1.65 4.17 0.0069 3.54 6.91 0.0115 5.86
1000 3.28 0.0033 2.59 7.02 0.0070 5.53 11.63 0.0116 9.17
2 300 1.21 0.0040 1.01 2.59 0.0086 2.16 4.29 0.0143 3.57
600 2.23 0.0037 1.90 4.76 0.0079 4.07 7.89 0.0132 6.73
1000 3.65 0.0037 3.02 7.81 0.0078 6.44 12.94 0.0129 10.67
3 300 1.10 0.0037 0.92 2.35 0.0078 1.96 3.89 0.0130 3.24
600 2.09 0.0035 1.76 4.48 0.0075 3.76 7.42 0.0124 6.22
1000 3.42 0.0034 2.81 7.32 0.0073 6.00 12.12 0.0121 9.93
4 300 1.10 0.0037 0.95 2.35 0.0078 2.03 3.89 0.0130 3.37
600 1.96 0.0033 1.69 4.19 0.0070 3.62 6.94 0.0116 5.99
1000 3.50 0.0035 2.74 7.49 0.0075 5.85 12.39 0.0124 9.67
5 300 1.11 0.0037 0.95 2.37 0.0079 2.03 3.92 0.0131 3.36
600 2.09 0.0035 1.77 4.48 0.0075 3.78 7.41 0.0124 6.25
1000 3.71 0.0037 2.91 7.92 0.0079 6.21 13.10 0.0131 10.26
6 300 1.11 0.0037 0.94 2.38 0.0079 2.01 3.93 0.0131 3.33
600 1.96 0.0033 1.67 4.20 0.0070 3.58 6.97 0.0116 5.93
1000 3.28 0.0033 2.55 7.02 0.0070 5.45 11.63 0.0116 9.03
7 300 0.82 0.0027 0.81 1.75 0.0058 1.73 2.90 0.0097 2.86
600 2.07 0.0035 1.71 4.43 0.0074 3.65 7.33 0.0122 6.03
1000 3.50 0.0035 2.79 7.47 0.0075 5.95 12.35 0.0124 9.83
8 300 1.25 0.0042 1.03 2.67 0.0089 2.20 4.42 0.0147 3.64
600 2.23 0.0037 1.91 4.77 0.0080 4.09 7.91 0.0132 6.77
1000 3.38 0.0034 2.99 7.24 0.0072 6.39 12.00 0.0120 10.59
9 300 1.22 0.0041 1.02 2.61 0.0087 2.18 4.33 0.0144 3.60
600 2.26 0.0038 1.91 4.83 0.0080 4.07 7.99 0.0133 6.74
1000 3.62 0.0036 3.03 7.73 0.0077 6.48 12.81 0.0128 10.73
10 300 1.28 0.0043 1.02 2.72 0.0091 2.17 4.51 0.0150 3.58
600 2.21 0.0037 1.91 4.73 0.0079 4.07 7.83 0.0131 6.74
1000 3.48 0.0035 3.00 7.44 0.0074 6.42 12.34 0.0123 10.64
11 300 1.44 0.0048 1.13 3.08 0.0103 2.42 5.10 0.0170 4.01
600 2.34 0.0039 2.02 5.01 0.0084 4.33 8.31 0.0138 7.17
1000 3.43 0.0034 3.01 7.36 0.0074 6.44 12.21 0.0122 10.68
12 300 1.30 0.0043 1.04 2.78 0.0093 2.21 4.59 0.0153 3.66
600 2.40 0.0040 2.03 5.14 0.0086 4.34 8.52 0.0142 7.18
1000 3.59 0.0036 3.12 7.69 0.0077 6.68 12.76 0.0128 11.08
13 300 1.17 0.0039 0.91 2.49 0.0083 1.93 4.11 0.0137 3.19
600 2.29 0.0038 1.92 4.90 0.0082 4.10 8.10 0.0135 6.78
1000 3.57 0.0036 3.09 7.64 0.0076 6.60 12.66 0.0127 10.94
14 300 1.46 0.0049 1.20 3.12 0.0104 2.56 5.16 0.0172 4.24
600 2.41 0.0040 2.06 5.15 0.0086 4.40 8.53 0.0142 7.29
1000 3.56 0.0036 3.08 7.62 0.0076 6.59 12.63 0.0126 10.93
15 300 1.04 0.0035 0.77 2.22 0.0074 1.65 3.66 0.0122 2.72
600 2.39 0.0040 1.88 5.10 0.0085 4.02 8.43 0.0140 6.64
1000 3.87 0.0039 3.25 8.28 0.0083 6.95 13.71 0.0137 11.50
16 300 1.16 0.0039 1.15 2.48 0.0083 2.46 4.11 0.0137 4.08
600 2.53 0.0042 2.12 5.41 0.0090 4.53 8.95 0.0149 7.51
1000 3.70 0.0037 3.21 7.92 0.0079 6.87 13.13 0.0131 11.38
17 300 1.36 0.0045 1.05 2.90 0.0097 2.22 4.79 0.0160 3.66
600 2.66 0.0044 2.19 5.69 0.0095 4.67 9.40 0.0157 7.71
1000 4.21 0.0042 3.56 8.99 0.0090 7.60 14.89 0.0149 12.57
18 300 1.46 0.0049 1.20 3.12 0.0104 2.57 5.16 0.0172 4.25
600 2.53 0.0042 2.16 5.41 0.0090 4.61 8.96 0.0149 7.64
1000 3.89 0.0039 3.33 8.33 0.0083 7.11 13.79 0.0138 11.78
Table 6 – Welfare Changes for Non-Smoking Households
HH Type   $7 $15 $25
HH Type
  $7 $15 $25
1 300 1.11 0.0037 0.98 2.38 0.0079 2.10 3.94 0.013 3.48
600 2.03 0.0034 1.80 4.34 0.0072 3.85 7.19 0.012 6.38
1000 3.35 0.0034 2.82 7.17 0.0072 6.04 11.89 0.012 10.01
2 300 1.21 0.0040 1.07 2.58 0.0086 2.28 4.27 0.014 3.78
600 2.22 0.0037 1.96 4.76 0.0079 4.20 7.88 0.013 6.96
1000 3.44 0.0034 3.08 7.37 0.0074 6.60 12.23 0.012 10.93
3 300 1.16 0.0039 1.01 2.48 0.0083 2.16 4.11 0.014 3.57
600 2.03 0.0034 1.79 4.34 0.0072 3.84 7.19 0.012 6.36
1000 3.03 0.0030 2.67 6.50 0.0065 5.71 10.80 0.011 9.48
4 300 1.15 0.0038 1.01 2.46 0.0082 2.16 4.07 0.014 3.58
600 2.01 0.0034 1.74 4.31 0.0072 3.72 7.14 0.012 6.16
1000 3.43 0.0034 2.61 7.34 0.0073 5.59 12.15 0.012 9.25
5 300 1.12 0.0037 1.01 2.40 0.0080 2.17 3.99 0.013 3.59
600 2.08 0.0035 1.78 4.45 0.0074 3.80 7.36 0.012 6.28
1000 4.25 0.0043 3.07 9.08 0.0091 6.54 14.99 0.015 10.79
6 300 1.05 0.0035 0.93 2.25 0.0075 1.98 3.74 0.013 3.28
600 2.09 0.0035 1.79 4.47 0.0075 3.83 7.39 0.012 6.32
1000 4.11 0.0041 3.17 8.77 0.0088 6.77 14.46 0.015 11.15
7 300 1.15 0.0038 1.01 2.45 0.0082 2.17 4.06 0.014 3.59
600 1.99 0.0033 1.80 4.26 0.0071 3.86 7.07 0.012 6.40
1000 3.05 0.0031 2.65 6.54 0.0065 5.66 10.85 0.011 9.38
8 300 1.26 0.0042 1.10 2.68 0.0089 2.36 4.44 0.015 3.90
600 2.30 0.0038 2.02 4.92 0.0082 4.31 8.16 0.014 7.14
1000 3.44 0.0034 3.08 7.36 0.0074 6.59 12.21 0.012 10.93
9 300 1.31 0.0044 1.14 2.81 0.0094 2.43 4.64 0.016 4.02
600 2.31 0.0039 2.02 4.94 0.0082 4.31 8.19 0.014 7.14
1000 3.49 0.0035 3.03 7.47 0.0075 6.48 12.38 0.012 10.75
10 300 1.33 0.0044 1.13 2.84 0.0095 2.42 4.69 0.016 4.00
600 2.31 0.0038 2.01 4.93 0.0082 4.30 8.18 0.014 7.12
1000 3.48 0.0035 3.07 7.44 0.0074 6.57 12.34 0.012 10.89
11 300 1.31 0.0044 1.15 2.80 0.0093 2.46 4.63 0.015 4.07
600 2.30 0.0038 2.01 4.92 0.0082 4.30 8.16 0.014 7.12
1000 3.44 0.0034 3.05 7.37 0.0074 6.53 12.22 0.012 10.83
12 300 1.30 0.0043 1.10 2.79 0.0093 2.34 4.61 0.015 3.88
600 2.26 0.0038 1.96 4.83 0.0081 4.20 8.01 0.013 6.96
1000 3.51 0.0035 3.00 7.51 0.0075 6.42 12.46 0.013 10.64
13 300 1.27 0.0042 1.07 2.71 0.0090 2.29 4.49 0.015 3.78
600 2.41 0.0040 2.07 5.16 0.0086 4.43 8.53 0.014 7.33
1000 3.66 0.0037 3.24 7.83 0.0078 6.94 12.98 0.013 11.50
14 300 1.51 0.0050 1.23 3.21 0.0107 2.63 5.32 0.018 4.35
600 2.52 0.0042 2.17 5.38 0.0090 4.65 8.92 0.015 7.69
1000 3.68 0.0037 3.24 7.87 0.0079 6.93 13.05 0.013 11.49
15 300 1.22 0.0041 1.01 2.61 0.0087 2.15 4.32 0.014 3.56
600 2.38 0.0040 2.03 5.09 0.0085 4.34 8.42 0.014 7.17
1000 3.74 0.0037 3.19 8.00 0.0080 6.83 13.26 0.013 11.31
16 300 1.27 0.0042 1.11 2.72 0.0091 2.37 4.51 0.015 3.93
600 2.46 0.0041 2.07 5.25 0.0088 4.43 8.70 0.015 7.33
1000 3.71 0.0037 3.20 7.94 0.0079 6.85 13.15 0.013 11.34
17 300 1.40 0.0047 1.16 2.98 0.0099 2.47 4.92 0.016 4.08
600 2.50 0.0042 2.11 5.34 0.0089 4.52 8.83 0.015 7.47
1000 3.81 0.0038 3.22 8.15 0.0081 6.90 13.50 0.014 11.42
18 300 1.67 0.0056 1.41 3.57 0.0119 3.01 5.91 0.020 4.99
600 2.66 0.0044 2.31 5.70 0.0095 4.93 9.44 0.016 8.17
1000 3.87 0.0039 3.35 8.27 0.0083 7.16 13.72 0.014 11.87

Relative to no children and independent of the number of adults, the addition of a child clearly increases a household’s marginal excess burden at the higher total weekly expenditure levels.

Single adult, relative to multi-adult households with higher total expenditure levels, are similarly more adversely affected by the carbon tax. Figure 5 shows the marginal excess burdens incurred by single-adult and multi-adult households with no children when a $25 carbon tax is imposed. From multi-adult to single households, the marginal excess burden clearly tilts upwards over higher levels of weekly total expenditure. This result holds regardless of the number of children in the household.

When total expenditure levels exceed $600 per week, the marginal excess burdens incurred by couples where the head of the household is aged over 65 (household type 2) are substantially greater than those incurred by couples where both are aged under 65 (household type 8). Figure 6 compares the marginal excess burdens between these two smoking household types and shows that the two lines begin to diverge at the expenditure level of $600 per week in the case of a $25 carbon tax.

The marginal welfare cost of a tax, defined as , measures the marginal excess burden per dollar of additional tax revenue. For all three carbon taxes, the variation in this measure is very similar and lies between approximately 18 and 25 cents per dollar of additional tax revenue.

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