International Fuel Tax Assessment: An Application to Chile

Ian Parry and Jon Strand

No 2011/168, IMF Working Papers from International Monetary Fund

Abstract: Gasoline and diesel fuel are heavily taxed in many developed and some emerging and developing countries. Outside of the United States and Europe, however, there has been little attempt to quantify the external costs of vehicle use, so policymakers lack guidance on whether prevailing tax rates are economically efficient. This paper develops a general approach for estimating motor vehicle externalities, and hence corrective taxes on gasoline and diesel, based on pooling local data with extrapolations from U.S.evidence. The analysis is illustrated for the case of Chile, though it could be applied to other countries.

Keywords: WP; motor vehicle; gasoline tax; diesel tax; externalities; optimal tax; welfare gains; Chile; fuel economy elasticity; truck damage estimate; vehicle fuel economy improvement; truck externality; gasoline price elasticity; fuel economy increase; gasoline elasticity; Fuel tax; Public expenditure review; Gasoline; Fuel prices; Global (search for similar items in EconPapers)
Pages: 28
Date: 2011-07-01
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: International fuel tax assessment: an application to Chile (2012)
Working Paper: International Fuel Tax Assessment: An Application to Chile (2010)
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