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Gasoline Taxes and Consumer Behavior

Shanjun Li (), Joshua Linn () and Erich Muehlegger

American Economic Journal: Economic Policy, 2014, vol. 6, issue 4, 302-42

Abstract: Gasoline taxes can be employed to correct externalities from automobile use and to raise government revenue. Our understanding of the optimal gasoline tax and the efficacy of existing taxes is largely based on empirical analysis of consumer responses to gasoline price changes. In this paper, we examine directly how gasoline taxes affect gasoline consumption as distinct from tax-inclusive retail gasoline prices. We find robust evidence that consumers respond more strongly to gasoline tax changes under a variety of model specifications. We discuss two potential reasons for our main findings as well as their implications.

JEL-codes: D12 H21 H25 H31 L71 Q35 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/pol.6.4.302
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Working Paper: Gasoline Taxes and Consumer Behavior (2012) Downloads
Working Paper: Gasoline Taxes and Consumer Behavior (2012) Downloads
Working Paper: Gasoline Taxes and Consumer Behavior (2012) Downloads
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