Gasoline Taxes and Consumer Behavior ∗

@inproceedings{Li2011GasolineTA,
  title={Gasoline Taxes and Consumer Behavior ∗},
  author={Shanjun Li and Joshua Linn and Erich Muehlegger},
  year={2011}
}
Gasoline taxes can be employed to correct externalities associated with automobile use, to reduce dependency on foreign oil, and to raise government revenue. Our understanding of the optimal gasoline tax and the efficacy of existing taxes is largely based on empirical analysis of consumer responses to gasoline price changes. In this paper, we directly examine how gasoline taxes affect consumer behavior as distinct from tax-exclusive gasoline prices. Our analysis shows that a 5-cent tax increase… CONTINUE READING
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