This paper offers new evidence concerning the difference in consumers’ reactions to changes in gasoline taxes relative to market-induced changes in gasoline prices. Using microdata from the 2007 to 2009 rounds of the U.S. Consumer Expenditure Survey, we estimate a complete system of demand augmented with information on gasoline excise taxes. By relying on a complete system of demand, we are able to estimate elasticities that take behavioral responses into account. Crucially, the model allows gasoline taxes to affect demand in two distinct ways: through relative prices and as long-run policy signals. Different increases in gasoline taxes are considered for simulation. A 13.2 ¢/gallon tax increase, corresponding to a $15/tCO2 carbon tax, is found to cause, in the long run, a reductioningasolinedemandthatis about seventimes as big as that induced by an equal market-induced price increase. The same measure of differential demand response is derived for tax increases different in size as well as by income quintile and by region. We discuss the implications of our findings for the design of corrective taxation in the private transport sector. © 2016 Elsevier B.V. All rights reserved

Tiezzi, S., Verde, S.F. (2016). Differential demand response to gasoline taxes and gasoline prices in the U.S. RESOURCE AND ENERGY ECONOMICS, 44, 71-91 [10.1016/j.reseneeco.2016.02.003].

Differential demand response to gasoline taxes and gasoline prices in the U.S.

Tiezzi, Silvia;Verde, Stefano F.
2016-01-01

Abstract

This paper offers new evidence concerning the difference in consumers’ reactions to changes in gasoline taxes relative to market-induced changes in gasoline prices. Using microdata from the 2007 to 2009 rounds of the U.S. Consumer Expenditure Survey, we estimate a complete system of demand augmented with information on gasoline excise taxes. By relying on a complete system of demand, we are able to estimate elasticities that take behavioral responses into account. Crucially, the model allows gasoline taxes to affect demand in two distinct ways: through relative prices and as long-run policy signals. Different increases in gasoline taxes are considered for simulation. A 13.2 ¢/gallon tax increase, corresponding to a $15/tCO2 carbon tax, is found to cause, in the long run, a reductioningasolinedemandthatis about seventimes as big as that induced by an equal market-induced price increase. The same measure of differential demand response is derived for tax increases different in size as well as by income quintile and by region. We discuss the implications of our findings for the design of corrective taxation in the private transport sector. © 2016 Elsevier B.V. All rights reserved
2016
Tiezzi, S., Verde, S.F. (2016). Differential demand response to gasoline taxes and gasoline prices in the U.S. RESOURCE AND ENERGY ECONOMICS, 44, 71-91 [10.1016/j.reseneeco.2016.02.003].
File in questo prodotto:
File Dimensione Formato  
Tiezzi-Verde_2016_REE-PUB.pdf

non disponibili

Tipologia: PDF editoriale
Licenza: NON PUBBLICO - Accesso privato/ristretto
Dimensione 865.04 kB
Formato Adobe PDF
865.04 kB Adobe PDF   Visualizza/Apri   Richiedi una copia
Tiezzi.pdf

accesso aperto

Tipologia: Pre-print
Licenza: PUBBLICO - Pubblico con Copyright
Dimensione 352.16 kB
Formato Adobe PDF
352.16 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11365/990139