Perfect Competition, Urbanization, and Tax Incidence in the Retail Gasoline Market

Download or read book Perfect Competition, Urbanization, and Tax Incidence in the Retail Gasoline Market written by James Alm and published by . This book was released on 2009 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We use monthly gasoline price data for all 50 U.S. states over the period 1984-1999 to examine the incidence of state gasoline excise taxes. Our estimation results indicate full shifting of gasoline taxes to the final consumer. In addition, although we find that gasoline retail prices demonstrate asymmetric responses to changes in gasoline wholesale prices, we find only limited evidence of such behavior for retail prices with respect to gasoline excise taxes. Finally, we find that gasoline markets in urban states exhibit full shifting, but those in rural states (with less competition) demonstrate somewhat less than full shifting.