Abstract

http://ssrn.com/abstract=2131468
 


 



Salience of Carbon Taxes in the Gasoline Market


Nicholas Rivers


University of Ottawa - Graduate School of Public and International Affairs

Brandon Schaufele


University of Ottawa - Department of Economics

June 10, 2013


Abstract:     
We demonstrate that the carbon tax imposed by the Canadian province of British Columbia caused a decline in short-run gasoline demand that is significantly greater than would be expected from an equivalent increase in the market price of gasoline. That the carbon tax is more salient, or yields a larger change in demand than equivalent market price movements, is robust to a range of specifications. Along with calculating the reduction in carbon dioxide emissions attributable to the tax, we discuss potential explanations for the differential consumer responses to the carbon tax relative to the market-determined price.

Number of Pages in PDF File: 39

Keywords: Carbon tax, tax salience, instrumental variables, environmental pricing, gasoline demand

JEL Classification: C26, H23, H29, Q41, Q58

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Date posted: August 18, 2012 ; Last revised: June 13, 2013

Suggested Citation

Rivers, Nicholas and Schaufele, Brandon, Salience of Carbon Taxes in the Gasoline Market (June 10, 2013). Available at SSRN: http://ssrn.com/abstract=2131468 or http://dx.doi.org/10.2139/ssrn.2131468

Contact Information

Nicholas Rivers
University of Ottawa - Graduate School of Public and International Affairs ( email )
75 Laurier Avenue East
Ottawa, Ontario K1N 6N5
Canada
Brandon Schaufele (Contact Author)
University of Ottawa - Department of Economics ( email )
200 Wilbrod Street
Ottawa, Ontario K1N 6N5
Canada
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