Use or Abuse of Highway Tax Revenues? An Economic Analysis of Highway Spending

Applied Economics Letters, vol. 10, no. 13, pp. 813-819

Posted: 6 Apr 2016

See all articles by Rajeev K. Goel

Rajeev K. Goel

Illinois State University - Department of Economics

Michael A Nelson

Independent

Date Written: 2003

Abstract

This article develops a theoretical model and employs recent state-level data on highway finance to assess the consequences of using highway levies for non-highway purposes. It examines whether states that divert some of their highway-related levies to fund general government services spend systematically less on highway services than jurisdictions that do not; the 'displacement effect' of revenue diversion. The results show that states that use highway related levies to fund general government services do systematically spend less on highways than states that do not.

Suggested Citation

Goel, Rajeev K. and Nelson, Michael A, Use or Abuse of Highway Tax Revenues? An Economic Analysis of Highway Spending (2003). Applied Economics Letters, vol. 10, no. 13, pp. 813-819. Available at SSRN: https://ssrn.com/abstract=2758947

Rajeev K. Goel (Contact Author)

Illinois State University - Department of Economics ( email )

Normal, IL 61790-4200
United States

Michael A Nelson

Independent ( email )

No Address Available
United States

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