%0 Report
        %A Ganapati, Sharat
%A Shapiro, Joseph S.
%A Walker, Reed
        %T Energy Prices, Pass-Through, and Incidence in U.S. Manufacturing
        %D 2016
        %8 2016 May
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 9932
        %U https://www.iza.org/publications/dp9932
        %X This paper studies how increases in energy input costs for production are split between consumers and producers via changes in product prices (i.e., pass-through). We show that in markets characterized by imperfect competition, marginal cost pass-through, a demand elasticity, and a price-cost markup are sufficient to characterize the relative change in welfare between producers and consumers due to a change in input costs. We find that increases in energy prices lead to higher plant-level marginal costs and output prices but lower markups. This suggests that marginal cost pass-through is incomplete, with estimates centered around 0.7. Our confidence intervals reject both zero pass-through and complete pass-through. We find heterogeneous incidence of changes in input prices across industries, with consumers bearing a smaller share of the burden than standards methods suggest.
        %K energy prices
%K incidence
%K environmental taxation