International fuel tax assessment: an application to Chile.

Parry, Ian; Strand, Jon

Gasoline and diesel fuel are heavily taxed in many developed and some emerging and developing countries. Outside the United States and Europe, however, there has been little attempt to quantify the external costs of vehicle use, so policy makers lack guidance on whether prevailing tax rates are economically efficient. This paper develops a general approach for estimating motor vehicle externalities, and hence corrective taxes on gasoline and diesel, based on pooling local data with extrapolations from US evidence. The analysis is illustrated for the case of Chile, although it could be applied to other countries.

UNITED States; CHILE; MOTOR fuels; TAXATION; DIESEL fuels; TAX assessment; ECONOMIC policy; ECONOMIC efficiency; DEVELOPING countries

Environment & Development Economics, 2012, Vol 17, Issue 2, p127

1355-770X

Academic Journal

10.1017/S1355770X11000404