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PERFECT COMPETITION, URBANIZATION, AND TAX INCIDENCE IN THE RETAIL GASOLINE MARKET |
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| Authors: | JAMES ALM EDWARD SENNOGA MARK SKIDMORE |
| Institution: | Alm:;Professor and Dean, Andrew Young School of Policy Studies, Georgia State University, Campus Box 3992, Atlanta, GA 30302-3992. Phone 404-413-0093, Fax 404-413-0004, E-mail . Sennoga:;Professor, Department of Economic Policy and Planning, Faculty of Economics and Management, Makerere University, P.O. Box 7062, Kampala, Uganda. Phone +256-41-4-530115, E-mail . Skidmore:;Professor and Morris Chair in State and Local Government Finance and Policy, Department of Agricultural Economics, Michigan State University, East Lansing, Michigan 48824-1039. Phone 517-353-9172, Fax 517-432-1800, E-mail . |
| Abstract: | 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 . ( JEL H22) |
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