c MPG for Ohio and US from FHWA 2013 Highway Statistics
d Average annual income in our sample is based on the average annual income of the zip codes where drivers in the sample live. Median household income for Ohio and US obtained from the 2010 American Communities Survey.
e Defined as more than 4 years old. The figure for the U.S. was constructed using automobile sales data from the St. Louis Federal Reserve Bank and from estimates of scrappage rates in Jacobsen and van Benthem (2015).
f Urban population as defined in the 2010 U.S. Census.
All robust standard errors are clustered at the county level.
***Significant at the 1% level; **Significant at 5% level; *Significant at 10% level.
a The definitions of high VMT, rural, low MPG, and high displacement are given in the text.
b Weather controls include the number of days in a month with precipitation and the number of days a month with minimum temperature of less than or equal to 32 degrees.
c Macroeconomic controls include at the county level: the unemployment rate, the percent of the population in urban areas, level of employment, real GDP, and wages and compensation.
Table 3 Annual Net Benefits ($2013) From a Gasoline Tax and VMT Tax to Reduce Fuel Consumption 1%
Source: Authors’ calculations. Some columns may not sum precisely due to rounding. Total external costs include a government service externality and a local air pollution externality in addition to the congestion, accident, and CO2 externalities listed.
Table 4 Annual Net Benefits ($2013) From a Gasoline Tax and VMT Tax To Raise $55 billion Per Year For Highway Spending
40.8 cent/gallon gas tax
1.99 cent/mile VMT tax
Effect on:
VMT (billion miles)
-38.0
-39.1
Consumer Surplus ($billions)
-55.4
-55.5
Government Revenues ($billions)
55.0
55.2
Congestion ($billions)
-3.66
-3.76
CO2 ($billions)
-0.73
-0.72
Accidents ($billions)
-2.07
-2.13
Local Air Pollution ($billions)
-0.45
-0.46
Total External costs ($billions)
-6.9
-7.1
Net Benefits ($billions)
6.5
6.7
Source: Authors’ calculations. Some columns may not sum precisely due to rounding. Total external costs include a government service externality and a local air pollution externality in addition to the congestion, accident, and CO2 externalities listed.
Table 5: Annual Net Benefits ($2013) From a Gasoline Tax and VMT Tax to Raise at Least $55 billion Per Year For Highway Spending, Assuming Average Automobile Fuel Economy Improves 40%*
54.9 cent/gallon gas tax
1.99 cent/mile VMT tax
Change in:
VMT (billion miles)
-53.5
-57.0
Consumer Surplus ($billions)
-55.5
-57.9
Government Revenues ($billions)
55.0
57.3
Externalities ($billions)
-9.4
-9.9
Net Benefits ($billions)
8.9
9.4
*All changes are relative to a 40% improvement in fuel economy without either tax in place.
Source: Authors’ calculations. Some columns may not sum precisely due to rounding.