Gasoline Taxes and Consumer Behavior

Shanjun Li, Joshua Linn and Erich Muehlegger

No 17891, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Gasoline taxes can be employed to correct externalities from automobile use and to raise government revenue. Our understanding of the optimal gasoline tax and the efficacy of existing taxes is largely based on empirical analysis of consumer responses to gasoline price changes. In this paper, we directly examine how gasoline taxes affect gasoline consumption as distinct from tax-inclusive retail gasoline prices. We find robust evidence that consumers respond more strongly to gasoline tax changes under a variety of model specifications. We discuss two potential reasons for our main findings as well as their implications.

JEL-codes: H3 Q4 Q5 (search for similar items in EconPapers)
Date: 2012-03
New Economics Papers: this item is included in nep-ene, nep-pbe, nep-pub and nep-tre
Note: EEE IO PE
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Citations: View citations in EconPapers (33)

Published as Gasoline Taxes and Consumer Behavior (with Shanjun Li and Erich Muehlegger). American Economic Journal: Economic Policy, forthcoming.

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Related works:
Journal Article: Gasoline Taxes and Consumer Behavior (2014)
Working Paper: Gasoline Taxes and Consumer Behavior (2012)
Working Paper: Gasoline Taxes and Consumer Behavior (2012)
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