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The Effect of Gasoline Taxes and Public Transit Investments on Driving Patterns

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  • Elisheba Spiller
  • Heather Stephens
  • Christopher Timmins
  • Allison Smith

Abstract

This paper analyzes how driving patterns are affected by gasoline taxes and the availability of a substitute for driving—public transportation. We develop a measure of transportation substitutability based on the difference between individuals’ predicted commute times by private and public transit, conditional upon their demographic characteristics and geographic location. Improved substitutability decreases annual vehicle miles traveled (VMT) by inducing modal shifts to public transit, though gasoline taxes are found to have a much larger impact on VMT. Our results imply that a policy that raises gasoline taxes and recycles the revenues into public transit improvements can have even larger impacts on driving patterns than either policy alone. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • Elisheba Spiller & Heather Stephens & Christopher Timmins & Allison Smith, 2014. "The Effect of Gasoline Taxes and Public Transit Investments on Driving Patterns," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 59(4), pages 633-657, December.
    • Handle: RePEc:kap:enreec:v:59:y:2014:i:4:p:633-657
    DOI: 10.1007/s10640-013-9753-9
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    6. Dissanayake, Sumali & Mahadevan, Renuka & Asafu-Adjaye, John, 2018. "How efficient are market-based instruments in mitigating climate change in small emitter South Asian economies?," Economic Modelling, Elsevier, vol. 75(C), pages 169-180.

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