Advanced Search
MyIDEAS: Login to save this paper or follow this series

Fuel Tax Incidence and Supply Conditions

Contents:

Author Info

  • Justin Marion
  • Erich Muehlegger

Abstract

The incidence of taxes on consumers and producers plays a central role in evaluating energy tax policy, yet the literature testing the main predictions of the tax incidence model is sparse. In this paper, we examine the pass-through rate of state gasoline and diesel taxes to retail prices, and importantly we estimate the dependence of pass-through on factors constraining the gasoline and diesel supply chains. We consider several factors that alter the elasticity of supply, including within state heterogeneity in gasoline content requirements, refinery capacity utilization, inventory constraints, and variation in the demand for untaxed uses of diesel. In general, we find that in periods of time when the supply chain is constrained, and the constraint is plausibly unrelated to shifts in demand, the pass-through rate of fuel taxes declines. We describe several potential implications for tax policy, including tax breaks during peak driving season and during times of supply disruptions such as after major hurricanes.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.nber.org/papers/w16863.pdf
Download Restriction: no

Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16863.

as in new window
Length:
Date of creation: Mar 2011
Date of revision:
Publication status: published as Marion, Justin & Muehlegger, Erich, 2011. "Fuel tax incidence and supply conditions," Journal of Public Economics, Elsevier, vol. 95(9), pages 1202-1212.
Handle: RePEc:nbr:nberwo:16863

Note: EEE PE
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Email:
Web page: http://www.nber.org
More information through EDIRC

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Hamilton, Stephen F., 1999. "Tax incidence under oligopoly: a comparison of policy approaches," Journal of Public Economics, Elsevier, Elsevier, vol. 71(2), pages 233-245, February.
  2. Chernick, Howard & Reschovsky, Andrew, 1997. "Who Pays the Gasoline Tax?," National Tax Journal, National Tax Association, vol. 50(2), pages 233-59, June.
  3. Pindyck, Robert S., 1990. "Inventories and the short-run dynamics of commodity prices," Working papers, Massachusetts Institute of Technology (MIT), Sloan School of Management 3133-90., Massachusetts Institute of Technology (MIT), Sloan School of Management.
  4. James B. Bushnell & Howard Chong & Erin T. Mansur, 2009. "Profiting from Regulation: An Event Study of the EU Carbon Market," NBER Working Papers 15572, National Bureau of Economic Research, Inc.
  5. Devereux, Michael & Lockwood, Ben & Redoano, Michela, 2004. "Horizontal And Vertical Indirect Tax Competition : Theory And Some Evidence From The Usa," The Warwick Economics Research Paper Series (TWERPS), University of Warwick, Department of Economics 704, University of Warwick, Department of Economics.
  6. Justin Marion & Erich Muehlegger, 2008. "Measuring Illegal Activity and the Effects of Regulatory Innovation: Tax Evasion and the Dyeing of Untaxed Diesel," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 116(4), pages 633-666, 08.
  7. Muehlegger, Erich, 2006. "Gasoline Price Spikes and Regional Gasoline Content Regulation: A Structural Approach," Working Paper Series, Harvard University, John F. Kennedy School of Government rwp06-015, Harvard University, John F. Kennedy School of Government.
  8. Slemrod, Joel & Yitzhaki, Shlomo, 2002. "Tax avoidance, evasion, and administration," Handbook of Public Economics, Elsevier, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 22, pages 1423-1470 Elsevier.
  9. James Alm & Edward Sennoga & Mark Skidmore, 2009. "Perfect Competition, Urbanization, And Tax Incidence In The Retail Gasoline Market," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 47(1), pages 118-134, 01.
  10. repec:cdl:agrebk:5335 is not listed on IDEAS
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Thomas Klier & Joshua Linn, 2011. "Fuel Prices and New Vehicle Fuel Economy in Europe," Working Papers, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research 1117, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
  2. Klier, Thomas & Linn, Joshua, 2013. "Fuel prices and new vehicle fuel economy—Comparing the United States and Western Europe," Journal of Environmental Economics and Management, Elsevier, vol. 66(2), pages 280-300.
  3. Mario Jametti & Agustin Redonda & Anindya Sen, 2013. "The Power to Pass on Taxes - A Test for Tax Shifting based on Observables," Quaderni della facoltà di Scienze economiche dell'Università di Lugano, USI Università della Svizzera italiana 1301, USI Università della Svizzera italiana.
  4. Li, Shanjun & Linn, joshua & Muehlegger, Erich J., 2012. "Gasoline Taxes and Consumer Behavior," Scholarly Articles 8506866, Harvard Kennedy School of Government.
  5. Webster, Allan & Ayatakshi, Sukanya, 2013. "The effect of fossil energy and other environmental taxes on profit incentives for change in an open economy: Evidence from the UK," Energy Policy, Elsevier, Elsevier, vol. 61(C), pages 1422-1431.
  6. Linn, Joshua, 2014. "Explaining the Adoption of Diesel Fuel Passenger Cars in Europe," Discussion Papers, Resources For the Future dp-14-08, Resources For the Future.
  7. Shanjun Li & Joshua Linn & Erich Muehlegger, 2012. "Gasoline Taxes and Consumer Behavior," NBER Working Papers 17891, National Bureau of Economic Research, Inc.
  8. Mark J. Holmes & Jesús Otero & Theodore Panagiotidis, 2012. "On the Dynamics of Gasoline Market Integration in the United States: Evidence from a Pair-Wise Approach," Working Paper Series, The Rimini Centre for Economic Analysis 68_12, The Rimini Centre for Economic Analysis.
  9. Doerrenberg, Philipp & Duncan, Denvil, 2014. "Tax Incidence in the Presence of Tax Evasion," IZA Discussion Papers 8137, Institute for the Study of Labor (IZA).
  10. Natalia Fabra & Mar Reguant, 2013. "Pass-through of Emissions Costs in Electricity Markets," NBER Working Papers 19613, National Bureau of Economic Research, Inc.
  11. Chiou, Lesley & Muehlegger, Erich J., 2010. "Consumer Response to Cigarette Excise Tax Changes," Scholarly Articles 4448875, Harvard Kennedy School of Government.
  12. Daniel H. Cooper & Byron F. Lutz & Michael G. Palumbo, 2012. "Quantifying the role of federal and state taxes in mitigating wage inequality," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2012-05, Board of Governors of the Federal Reserve System (U.S.).
  13. Kolodzeij, Marek & Kaufmann, Robert.K., 2014. "Oil demand shocks reconsidered: A cointegrated vector autoregression," Energy Economics, Elsevier, Elsevier, vol. 41(C), pages 33-40.
  14. Tuomas Kosonen, 2013. "More haircut after VAT cut? On the efficiency of service sector consumption taxes," Working Papers, Government Institute for Economic Research Finland (VATT) 49, Government Institute for Economic Research Finland (VATT).
  15. Natalia Fabra & Mar Reguant, 2014. "Pass-Through of Emissions Costs in Electricity Markets," American Economic Review, American Economic Association, American Economic Association, vol. 104(9), pages 2872-99, September.
  16. Nicholas Rivers & Brandon Schaufele, 2012. "Carbon Tax Salience and Gasoline Demand," Working Papers, University of Ottawa, Department of Economics 1211E, University of Ottawa, Department of Economics.
  17. Wojciech Kopczuk & David J. Munroe, 2014. "Mansion Tax: The Effect of Transfer Taxes on the Residential Real Estate Market," NBER Working Papers 20084, National Bureau of Economic Research, Inc.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:16863. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.