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Measuring The Primary Impacts Of Severance Taxation: A Spatial Equilibrium Approach

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  • Findeis, Jill L.
  • Shortle, James S.
  • Kibler, Virginia

Abstract

A spatial equilibrium model is used to quantify the effects of a severance tax on the Pennsylvania coal market. Two regions are identified: the Pennsylvania Market Area and an import/export region. The impacts on prices and quantities of coal supplied and demanded are found to be small. Little of the tax is exported from Pennsylvania, with a high proportion of the tax being passed back to Pennsylvania coal producers. Although the tax revenue exceeds the welfare losses in Pennsylvania, this result is very sensitive to the magnitude of the Pennsylvania own-price demand elasticity.

Suggested Citation

  • Findeis, Jill L. & Shortle, James S. & Kibler, Virginia, 1988. "Measuring The Primary Impacts Of Severance Taxation: A Spatial Equilibrium Approach," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 17(1), pages 1-8, April.
    • Handle: RePEc:ags:nejare:29072
    DOI: 10.22004/ag.econ.29072
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    References listed on IDEAS

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    1. William E. Morgan & John H. Mutti, 1981. "Shifting, Incidence, and Inter-State Exportation of Production Taxes on Energy Resources," Land Economics, University of Wisconsin Press, vol. 57(3), pages 422-435.
    2. Findeis, Jill L. & Shortle, James S., 1985. "Trade-Offs Between Severance Tax Revenues And Coal Mining Employment," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 14(2), pages 1-8, October.
    3. Beierlein, James G & Dunn, James W & McConnon, James C, Jr, 1981. "The Demand for Electricity and Natural Gas in the Northeastern United States," The Review of Economics and Statistics, MIT Press, vol. 63(3), pages 403-408, August.
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