IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/18685.html
   My bibliography  Save this paper

The Energy-Policy Efficiency Gap: Was There Ever Support for Gasoline Taxes?

Author

Listed:
  • Christopher R. Knittel

Abstract

From 1864 to 1972, the real price of oil fell by, on average, over one percent per year. This trend dramatically broke when prices for crude increased by over 650 percent from 1972 to 1980. Policy makers adopted several policies designed to keep oil prices in check and reduce consumption. Missing from these policies were taxes on either oil or gasoline, prompting a long economics literature documenting the inefficiencies of these alternative policies. In this paper, I review the policy discussion related to the transportation sector that occurred during the time through the lens of the printed press. In doing so, I pay particular attention to whether gasoline taxes were "on the table," as well as how consumers viewed the inefficient set of policies that were ultimately adopted. The discussions at the time suggest that meaningful changes in gasoline taxes were on the table; the public discussion seemed to be much greater than it is today. Some in Congress and many presidential advisors in the Nixon, Ford, and, Carter administrations supported and proposed gasoline taxes. The main roadblocks for taxes were Congress and the American people. Polling evidence at the time suggests that consumers preferred price controls and rationing and vehicle taxes over higher gasoline taxes or letting gasoline prices clear the market. Given the saliency of rationing and vehicle taxes, it seems difficult to argue that these alternative polices were adopted because they hide their true costs.

Suggested Citation

  • Christopher R. Knittel, 2013. "The Energy-Policy Efficiency Gap: Was There Ever Support for Gasoline Taxes?," NBER Working Papers 18685, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:18685
    Note: EEE IO POL
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w18685.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Christopher R. Knittel, 2012. "Reducing Petroleum Consumption from Transportation," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 93-118, Winter.
    2. Smith, Rodney T, 1982. "An Economic Analysis of Income Growth by U.S. Oil Firms: The Roles of U.S. Oil Regulation and OPEC," The Journal of Business, University of Chicago Press, vol. 55(4), pages 427-478, October.
    3. Deacon, Robert T & Sonstelie, Jon, 1985. "Rationing by Waiting and the Value of Time: Results from a Natural Experiment," Journal of Political Economy, University of Chicago Press, vol. 93(4), pages 627-647, August.
    4. Alan A. Tait & David R. Morgan, 1980. "Gasoline Taxation in Selected OECD Countries, 1970-79 (Taxation de l'essence dans certains pays de l'OCDE, 1970-79) (Los impuestos a la gasolina en un grupo de países miembros de la OCDE, 1970-79)," IMF Staff Papers, Palgrave Macmillan, vol. 27(2), pages 349-379, June.
    5. Stephen Erfle & Henry McMillan, 1990. "Media, Political Pressure, and the Firm: The Case of Petroleum Pricing in the Late 1970s," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(1), pages 115-134.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lade, Gabriel E & Lawell, C-Y Cynthia Lin, 2015. "Mandating green: On the Design of Renewable Fuel Policies and Cost Containment Mechanisms," Institute of Transportation Studies, Working Paper Series qt5zj382t4, Institute of Transportation Studies, UC Davis.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Christopher R. Knittel, 2014. "The Political Economy of Gasoline Taxes: Lessons from the Oil Embargo," NBER Chapters, in: Tax Policy and the Economy, Volume 28, pages 97-131, National Bureau of Economic Research, Inc.
    2. De Borger, Bruno & Mulalic, Ismir & Rouwendal, Jan, 2016. "Measuring the rebound effect with micro data: A first difference approach," Journal of Environmental Economics and Management, Elsevier, vol. 79(C), pages 1-17.
    3. Lucas W. Davis, Shaun Mcrae, and Enrique Seira Bejarano, 2019. "An Economic Perspective on Mexico's Nascent Deregulation of Retail Petroleum Markets," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    4. Rik Chakraborti & Gavin Roberts, 2023. "How price-gouging regulation undermined COVID-19 mitigation: county-level evidence of unintended consequences," Public Choice, Springer, vol. 196(1), pages 51-83, July.
    5. Philippe Aghion & Antoine Dechezleprêtre & David Hémous & Ralf Martin & John Van Reenen, 2016. "Carbon Taxes, Path Dependency, and Directed Technical Change: Evidence from the Auto Industry," Journal of Political Economy, University of Chicago Press, vol. 124(1), pages 1-51.
    6. Xu, Deyi & Sheraz, Muhammad & Hassan, Arshad & Sinha, Avik & Ullah, Saif, 2022. "Financial development, renewable energy and CO2 emission in G7 countries: New evidence from non-linear and asymmetric analysis," Energy Economics, Elsevier, vol. 109(C).
    7. Smith, V. Kerry & Mansfield, Carol, 1998. "Buying Time: Real and Hypothetical Offers," Journal of Environmental Economics and Management, Elsevier, vol. 36(3), pages 209-224, November.
    8. Lucas W. Davis & Christopher R. Knittel, 2019. "Are Fuel Economy Standards Regressive?," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 6(S1), pages 37-63.
    9. Scheitrum, Daniel, 2017. "Renewable Natural Gas as a Solution to Climate Goals: Response to California's Low Carbon Fuel Standard," MPRA Paper 77193, University Library of Munich, Germany.
    10. Lucas W. Davis, 2017. "The Environmental Cost of Global Fuel Subsidies," The Energy Journal, International Association for Energy Economics, vol. 0(KAPSARC S).
    11. Luca Zamparini & Aura Reggiani, 2007. "Meta-Analysis and the Value of Travel Time Savings: A Transatlantic Perspective in Passenger Transport," Networks and Spatial Economics, Springer, vol. 7(4), pages 377-396, December.
    12. Konishi, Yoshifumi & Kuroda, Sho, 2023. "Why is Japan’s carbon emissions from road transportation declining?," Japan and the World Economy, Elsevier, vol. 66(C).
    13. Robert Dur & Amihai Glazer, 2004. "Optimal Incentive Contracts when Workers envy their Boss," Tinbergen Institute Discussion Papers 04-046/1, Tinbergen Institute, revised 13 Jun 2006.
    14. Mónica Meireles & Margarita Robaina & Daniel Magueta, 2021. "The Effectiveness of Environmental Taxes in Reducing CO 2 Emissions in Passenger Vehicles: The Case of Mediterranean Countries," IJERPH, MDPI, vol. 18(10), pages 1-13, May.
    15. Chan, Nathan & Wichman, Casey, 2017. "The Effects of Climate on Leisure Demand: Evidence from North America," RFF Working Paper Series 17-20, Resources for the Future.
    16. FARAYIBI, Adesoji, 2016. "Service Delivery and Customer Satisfaction in Nigerian Banks," MPRA Paper 73612, University Library of Munich, Germany.
    17. Chatterjee, Chirantan & Kubo, Kensuke & Pingali, Viswanath, 2015. "The consumer welfare implications of governmental policies and firm strategy in markets for medicines," Journal of Health Economics, Elsevier, vol. 44(C), pages 255-273.
    18. Yueyue Fan & Allen Lee & Nathan Parkerf & Daniel Scheitrum & Amy Myers Jaffe & Rosa Dominguez-Faus & Kenneth Medlock III, 2017. "Geospatial, Temporal and Economic Analysis of Alternative Fuel Infrastructure: The Case of Freight and U.S. Natural Gas Markets," The Energy Journal, , vol. 38(6), pages 199-230, November.
    19. Magnus Söderberg & Makoto Tanaka, 2012. "Spatial price homogeneity as a mechanism to reduce the threat of regulatory intervention in locally monopolistic sectors," Working Papers hal-00659458, HAL.
    20. Ismail Saglam, 2022. "Self-regulation under asymmetric cost information," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 49(2), pages 335-368, June.

    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:18685. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.