Gasoline and Diesel Tax Incidence: The 2003 Washington State Nickel Funding Package

Silvia Louis () and Taylor Christopher T. ()
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Silvia Louis: Federal Trade Commission, Bureau of Economics, 600 Pennsylvania Ave, NW, Washington, DC 20580, United States of America
Taylor Christopher T.: Federal Trade Commission, Bureau of Economics, 600 Pennsylvania Ave, NW, Washington, DC 20580, United States of America

The B.E. Journal of Economic Analysis & Policy, 2016, vol. 16, issue 3, 1539-1562

Abstract: This paper considers a previously unexamined increase in excise taxes on gasoline and diesel fuel that were part of Washington State’s Nickel Funding Package of 2003. We fail to reject full pass-through of the amount of the tax increase to retail prices in both products. We find no significant sensitivity of retail pass-through to station locations relative to state borders or to retail competitive conditions as measured by local station density. The expansion of hypermarkets in Washington State during the period was a confounding factor in estimating tax pass-through effects.

Keywords: tax incidence; petroleum industry; difference in difference (search for similar items in EconPapers)
JEL-codes: H22 H71 L71 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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DOI: 10.1515/bejeap-2015-0070

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