International Fuel Tax Assessment: An Application to Chile

37 Pages Posted: 19 Jul 2011

See all articles by Ian W. H. Parry

Ian W. H. Parry

Resources for the Future

Jon Strand

International Monetary Fund (IMF)

Date Written: July 2011

Abstract

Gasoline and diesel fuel are heavily taxed in many developed and some emerging and developing countries. Outside of the United States and Europe, however, there has been little attempt to quantify the external costs of vehicle use, so policymakers 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 U.S.evidence. The analysis is illustrated for the case of Chile, though it could be applied to other countries.

Suggested Citation

Parry, Ian W. H. and Strand, Jon, International Fuel Tax Assessment: An Application to Chile (July 2011). IMF Working Paper No. 11/168, Available at SSRN: https://ssrn.com/abstract=1888911

Ian W. H. Parry

Resources for the Future ( email )

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Jon Strand

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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