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Distributional and efficiency impacts of gasoline taxes

Author

Listed:
  • Antonio Bento

    (Charles H. Dyson School of Applied Economics and Management)

  • Lawrence Goulder

    (Stanford Institute for Economic Policy Research)

  • Emeric Henry
  • Mark Jacobsen

    (Department of Economics (University of California San Diego, Tilburg University))

  • Roger Von Haefen

    (Agricultural and Resource Economics (NCSU))

Abstract

This article examines the gasoline tax option being proposed in the U.S. in 2005, employing an econometrically based multi-market simulation model to explore the policy's efficiency and distributional implications. Because of its potential to improve the environment and enhance national security, reducing automobile-related gasoline consumption has become a major U.S. public policy issue. Policy impacts both in the aggregate and across households distinguished by income, car-ownership, and other characteristics were examined. Simulation results show that whether a gas-tax increase is regressive in its impact depends on the manner in which the tax revenues are recycled to the economy. The results also reveal significant heterogeneity in welfare impacts within household income groups, thus highlighting the importance of accounting for household heterogeneity in tastes and car-ownership in evaluating distributional impacts.

Suggested Citation

  • Antonio Bento & Lawrence Goulder & Emeric Henry & Mark Jacobsen & Roger Von Haefen, 2005. "Distributional and efficiency impacts of gasoline taxes," Sciences Po publications info:hdl:2441/c8dmi8nm4pd, Sciences Po.
    • Handle: RePEc:spo:wpmain:info:hdl:2441/c8dmi8nm4pdjkuc9g8go564kn
    as

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    References listed on IDEAS

    as
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