IDEAS home Printed from
   My bibliography  Save this paper

What drives gasoline taxes?


  • Amihai GLAZER
  • Stef PROOST


Gasoline taxes are the most important tax on car use. The question naturally arises as to what tax would be adopted by a government that responds to the preferences of the public. To address that issue, we begin with the standard Downsian model, where policy is determined by the median voter. This model predicts that as long as the median voter is not a car user, he wants high taxes on road use and a road capacity that maximizes net tax revenues. When he becomes a driver himself, he wants road user taxes that are lower and only increase to control congestion, as well as more road capacity. We then use panel data for 28 countries and find support for our theory. When the median voter becomes a driver, the gasoline tax drops on average by 20%.

Suggested Citation

  • Fay DUNKERLEY & Amihai GLAZER & Stef PROOST, 2010. "What drives gasoline taxes?," Working Papers Department of Economics ces10.01, KU Leuven, Faculty of Economics and Business, Department of Economics.
  • Handle: RePEc:ete:ceswps:ces10.01

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Schmid, Friedrich & Schmidt, Rafael, 2007. "Multivariate conditional versions of Spearman's rho and related measures of tail dependence," Journal of Multivariate Analysis, Elsevier, vol. 98(6), pages 1123-1140, July.
    2. Joe, Harry, 1990. "Multivariate concordance," Journal of Multivariate Analysis, Elsevier, vol. 35(1), pages 12-30, October.
    3. Galina Besstremyannaya, 2007. "Out-of-Pocket Health Care Expenditures by Russian Consumers with Different Health Status," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 14(2), pages 331-338, November.
    4. Koen DECANCQ, 2010. "Copula-based orderings of multivariate dependence," Working Papers Department of Economics ces10.08, KU Leuven, Faculty of Economics and Business, Department of Economics.
    5. Valentino Dardanoni & Peter Lambert, 2001. "Horizontal inequity comparisons," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 18(4), pages 799-816.
    6. Colangelo, Antonio & Scarsini, Marco & Shaked, Moshe, 2006. "Some positive dependence stochastic orders," Journal of Multivariate Analysis, Elsevier, vol. 97(1), pages 46-78, January.
    7. Larry G. Epstein & Stephen M. Tanny, 1980. "Increasing Generalized Correlation: A Definition and Some Economic Consequences," Canadian Journal of Economics, Canadian Economics Association, vol. 13(1), pages 16-34, February.
    8. Denuit, Michel & Lambert, Philippe, 2005. "Constraints on concordance measures in bivariate discrete data," Journal of Multivariate Analysis, Elsevier, vol. 93(1), pages 40-57, March.
    9. Inna Blam & Sergey Kovalev, 2006. "Spontaneous commercialisation, inequality and the contradictions of compulsory medical insurance in transitional Russia," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(3), pages 407-423.
    10. Cebrián, Ana C. & Denuit, Michel & Scaillet, Olivier, 2004. "Testing for Concordance Ordering," ASTIN Bulletin: The Journal of the International Actuarial Association, Cambridge University Press, vol. 34(01), pages 151-173, May.
    11. A. B. Atkinson & F. Bourguignon, 1982. "The Comparison of Multi-Dimensioned Distributions of Economic Status," Review of Economic Studies, Oxford University Press, vol. 49(2), pages 183-201.
    12. M. Taylor, 2007. "Multivariate measures of concordance," Annals of the Institute of Statistical Mathematics, Springer;The Institute of Statistical Mathematics, vol. 59(4), pages 789-806, December.
    13. Marc Fleurbaey & Alain Trannoy, 2003. "The impossibility of a Paretian egalitarian," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 21(2), pages 243-263, October.
    14. Moulin, H & Thomson, W, 1995. "Axiomatic Analysis of Resource Allocation," RCER Working Papers 400, University of Rochester - Center for Economic Research (RCER).
    15. Doorslaer, Eddy van & Jones, Andrew M., 2003. "Inequalities in self-reported health: validation of a new approach to measurement," Journal of Health Economics, Elsevier, vol. 22(1), pages 61-87, January.
    16. Indranil Dutta & Prasanta K. Pattanaik & Yongsheng Xu, 2003. "On Measuring Deprivation and the Standard of Living in a Multidimensional Framework on the Basis of Aggregate Data," Economica, London School of Economics and Political Science, vol. 70(278), pages 197-221, May.
    17. Michael Lokshin & Martin Ravallion, 2008. "Testing for an economic gradient in health status using subjective data," Health Economics, John Wiley & Sons, Ltd., vol. 17(11), pages 1237-1259.
    Full references (including those not matched with items on IDEAS)


    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. A driving median voter reduces gas taxes
      by Economic Logician in Economic Logic on 2011-02-01 21:40:00


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

    Cited by:

    1. Russo, Antonio, 2013. "Voting on road congestion policy," Regional Science and Urban Economics, Elsevier, vol. 43(5), pages 707-724.
    2. De Borger, Bruno & Proost, Stef, 2012. "A political economy model of road pricing," Journal of Urban Economics, Elsevier, vol. 71(1), pages 79-92.
    3. Julien Daubanes & Lisa Leinert, 2012. "Optimum Tariffs and Exhaustible Resources: Theory and Evidence for Gasoline," CER-ETH Economics working paper series 12/163, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.

    More about this item


    gasoline taxes; median voter theory; political economy;

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

    NEP fields

    This paper has been announced in the following NEP Reports:


    This item is featured on the following reading lists or Wikipedia pages:
    1. Economic Logic blog


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ete:ceswps:ces10.01. 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: (library EBIB). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.