Carbon Tax Salience and Gasoline Demand
AbstractWe demonstrate that the carbon tax imposed by the Canadian province of British Columbia, a unique carbon pricing policy that comprehensively applies to all fossil fuels, caused a decline in short-run gasoline demand that is significantly greater than would be expected from an equivalent increase in the market price of gasoline. That the carbon tax is more salient, or yields a larger change in demand than equivalent market price movements, is robust to a range of specifications including intuitively plausible and strong instrumental variables. Along with calculating the reduction in carbon dioxide emissions attributable to the tax, we discuss potential explanations for the differential consumer responses to the carbon tax relative to the marketdetermined price.
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Bibliographic InfoPaper provided by University of Ottawa, Department of Economics in its series Working Papers with number 1211E.
Length: 57 pages
Date of creation: 2012
Date of revision:
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Web page: http://www.socialsciences.uottawa.ca/eco/eng/index.asp
More information through EDIRC
Carbon tax; tax salience; instrumental variables; environmental pricing; gasoline demand.;
Find related papers by JEL classification:
- C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- H29 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other
- Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-30 (All new papers)
- NEP-ENE-2012-09-30 (Energy Economics)
- NEP-ENV-2012-09-30 (Environmental Economics)
- NEP-RES-2012-09-30 (Resource Economics)
- NEP-TRE-2012-09-30 (Transport Economics)
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.:
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