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Taxed to death? Freight truck collision externalities and diesel taxes

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  • Nehiba, Cody

Abstract

This paper decomposes the external accident costs of freight trucking into two components—truck miles traveled and truck weight. The effects of miles traveled and weight on accidents are then applied to an analysis of diesel fuel taxes, which reduce truck miles traveled and increase truck weight. Exploiting a unique data set of 3.5 billion truck-level observations, I find that both measures of trucking activity increase the quantity of collisions, and truck-weight increases skew the collision distribution toward fatal outcomes. Heavier trucks do not alter the truck-only collision severity distribution, suggesting truckers do not experience truck-weight internalities. The increase in fatal collisions caused by levying a diesel tax that prices carbon emissions offsets the gains from reductions in pollution, congestion, and total collisions. The $0.37 per gallon diesel tax increase exacerbates the trucking accident externality to such an extent that it increases the external costs of trucking by $55.7 billion/year while also creating deadweight loss in the trucking industry.

Suggested Citation

  • Nehiba, Cody, 2020. "Taxed to death? Freight truck collision externalities and diesel taxes," Regional Science and Urban Economics, Elsevier, vol. 85(C).
    • Handle: RePEc:eee:regeco:v:85:y:2020:i:c:s0166046220302623
    DOI: 10.1016/j.regsciurbeco.2020.103577
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    References listed on IDEAS

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    Cited by:

    1. Muehlenbachs, Lucija & Staubli, Stefan & Chu, Ziyan, 2021. "The accident externality from trucking: Evidence from shale gas development," Regional Science and Urban Economics, Elsevier, vol. 88(C).

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    More about this item

    Keywords

    Externality; Freight trucking; Traffic accidents; Traffic fatalities; Diesel tax; Carbon emissions;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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