The Effects of Reducing the Motor Fuels Excise Tax on Agriculture in the United States

Noel D. Uri and Roy Boyd

Energy & Environment, 1997, vol. 8, issue 1, 45-63

Abstract: The analysis in this paper examines the impact of reducing the federal excise tax on gasoline and diesel fuel on the United States economy in general and the agricultural sectors in particular. The analytical approach used in the analysis consists of a computable general equilibrium model composed of fourteen producing sectors. fourteen consuming sectors, six household categories classified by income and a government. The effects of a 4.3 cents per gallon reduction in the excise tax on gasoline and diesel fuel in prices and quantities are examined. The results suggest. for example, a decrease in the tax would result in higher output by the producing sectors (by about $2.86 billion), a decline in output in the agricultural sectors of about 0.01 percent or $18.4 million. an expansion in the consumption of goods and services (by about $3.84 billion), and an increase in welfare (by about $3.59 billion). The government would realize a decrease in revenue of about $2.37 billion. When subjected to a sensitivity analysis. the results are reasonably robust with regard to the assumption of the values of the substitution elasticities.

Date: 1997
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0958305X9700800104 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:engenv:v:8:y:1997:i:1:p:45-63

DOI: 10.1177/0958305X9700800104

Access Statistics for this article

More articles in Energy & Environment
Bibliographic data for series maintained by SAGE Publications ().