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From gallons to miles: A disaggregate analysis of automobile travel and externality taxes

Ashley Langer, Vikram Maheshri and Clifford Winston ()

Journal of Public Economics, 2017, vol. 152, issue C, 34-46

Abstract: Policymakers have prioritized increasing highway revenues as rising fuel economy and a fixed federal gasoline tax have led to highway funding deficits. We use a novel disaggregate sample of motorists to estimate the effect of the price of a vehicle mile traveled on VMT, and we provide the first national assessment of VMT and gasoline taxes that are designed to raise a given amount of revenue. We find that a VMT tax dominates a gasoline tax on efficiency, distributional, and political grounds when policymakers enact independent fuel economy policies and when the VMT tax is differentiated with externalities imposed per mile.

Keywords: Gasoline tax; VMT tax; Driver heterogeneity (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:eee:pubeco:v:152:y:2017:i:c:p:34-46