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4.1 Welfare Changes (continued)

Figure 4 – Marginal Excess Burdens: The Addition of a Child
Figure 5 – Marginal Excess Burdens: Single versus Multi-Adult Households<
Figure 6 – Marginal Excess Burdens: The Presence of a 65+ Adult

The welfare measures in Tables 5 and 6 were based on three levels of total weekly expenditure. These expenditure levels were chosen for illustrative purposes. Within each household type, there is considerable variation. Table 7 reports the welfare changes at arithmetic mean weekly total expenditure levels for each household type (shown in Table 2), for the case of a $25 carbon tax. The welfare loss is about 1.3 percent for the $25 carbon tax, while the marginal welfare cost varies between approximately 15 and 18 cents for smoking households and 13 and 15 cents for non-smoking households per dollar of additional tax revenue.

Table 7 – Welfare Changes using Mean Expenditures for the $25 Carbon Tax
Household Type Smokers Non-Smokers
Mean Total Expenditure Mean Total Expenditure
1 267 3.14 0.0128 2.86 274 3.65 0.0133 3.22
2 498 6.71 0.0135 5.67 540 7.21 0.0133 6.34
3 406 5.15 0.0127 4.32 437 5.58 0.0128 4.91
4 400 4.89 0.0122 4.23 403 5.12 0.0127 4.50
5 428 5.38 0.0126 4.58 438 5.41 0.0123 4.73
6 468 5.66 0.0121 4.83 475 5.76 0.0121 4.97
7 501 6.11 0.0122 5.02 539 6.49 0.0120 5.86
8 690 8.87 0.0129 7.66 766 9.92 0.0130 8.77
9 668 8.78 0.0131 7.43 763 9.92 0.0130 8.67
10 707 8.96 0.0127 7.83 896 11.29 0.0128 10.10
11 805 10.39 0.0129 9.04 844 10.66 0.0126 9.42
12 673 9.34 0.0139 7.95 822 10.51 0.0128 9.05
13 975 12.40 0.0127 10.69 992 12.90 0.0130 11.42
14 898 11.61 0.0129 10.03 1038 13.41 0.0129 11.83
15 826 11.50 0.0139 9.42 920 12.35 0.0134 10.52
16 1311 16.12 0.0123 14.25 1282 16.03 0.0125 13.96
17 1110 16.36 0.0147 13.83 1129 14.96 0.0133 12.62
18 1070 14.60 0.0136 12.47 925 12.90 0.0140 11.21
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