Correcting heterogeneous externalities: Evidence from local fuel taxes

Author(s):  
Cody Nehiba
Keyword(s):  
Author(s):  
Chen (Sarah) Xu ◽  
Liang-Chieh (Victor) Cheng

Natural gas vehicles (NGV) have attracted more and more attention from policy makers since natural gas is a clean substitute for traditional fossil fuel that is also readily accessible. In some areas such as the state of Texas, vehicles that do not use traditional fossil fuel (e.g., NGVs) are exempt from paying fuel taxes. Government financial incentives have motivated substantial adoption of NGVs. This paper studies NGV adoption behavior in both U.S. and Texas markets to estimate the dynamics of NGV diffusion. This research employs well-known Bass diffusion models applied to NGV adoption, using data from both the U.S. and Texas. Among several interesting results, we find that NGV adoption through an imitation effect appears to be significant for the U.S. NGV market.


2005 ◽  
pp. 211-238 ◽  
Author(s):  
Sergey Paltsev ◽  
Henry D. Jacoby ◽  
John M. Reilly ◽  
Laurent Viguier ◽  
Mustapha Babiker

2018 ◽  
Vol 6 (3) ◽  
pp. 3029-3038 ◽  
Author(s):  
Abdulrahman M. Al-Bassam ◽  
Jeremy A. Conner ◽  
Vasilios I. Manousiouthakis

Author(s):  
Yiwei Wang ◽  
Qing Miao

A vehicle miles traveled (VMT) tax is often proposed to replace fuel taxes for financing the nation’s highway and road network. In this paper, we investigate households’ driving response to driving cost changes depending on their vehicle choices. Using the empirical estimates, we simulate the vehicle usage, tax burdens, and total tax revenues generated under a possible nationwide revenue-neutral flat VMT tax. Our results confirm that, compared with the current gasoline tax, a revenue-neutral flat VMT tax can be a more stable tax revenue source. We estimate that a 50% increase in average miles per gallon would lead to a 28% decrease in the total revenues raised by the current gasoline tax, while the same amount of increase in fuel economy would increase the VMT tax revenues by 4.4 % (all relative to the 2009 baseline). In the meantime, we find no significant difference between the two types of tax in their total revenues, when the pre-tax gasoline prices fluctuate by different magnitudes. A VMT tax would be slightly more regressive than the gasoline tax, but the difference is negligible. Overall, our simulation shows that VMT tax could serve as a viable alternative to gasoline taxes.


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