The Review of Economics and Statistics Vol. 61 No. 3 1979
Consumer Adjustment to a Gasoline Tax
Abstract
A study of how customers will respond to a tax based on miles per gallon indicates that the long-term effect on gasoline consumption could reduce crude oil imports by 27 percent. When demand elasticity of gasoline is broken down into the price elasticity of demand minus the price elasticity of demand for fuel mileage, it is learned that the short-term miles per gallon factor is larger than previously thought. Adjustments in the stock of automobiles to those providing better gas mileage is indicated by a 20 percent increase in miles per gallon with an additional 40 percent gasoline tax. 20 references.
- DOI
- 10.2307/1926072
- Volume
- 61
- Issue
- 3
- Pages
- 427
- Sources
- openalex crossref