Controlling Episodic Air Pollution With a Seasonal Gas Tax: The Case of Cache Valley, Utah

Authors

Leo A. Moscardini, Utah State University
Arthur J. Caplan, Utah State UniversityFollow

Document Type

Article

Journal/Book Title/Conference

Environmental and Resource Economics

Volume

66

Publisher

Springer Dordrecht

Publication Date

9-10-2015

First Page

689

Last Page

715

Abstract

Using daily data spanning 10 years, we establish a statistical relationship between episodic particulate-matter (PM_2.5) concentrations and vehicle trips in Cache Valley, Utah, and estimate an average gas-price elasticity for the region. We also estimate the benefits and costs associated with a seasonal gas tax set to reduce vehicle trips during the winter-inversion season and thereby lower health costs through concomitant decreases in the PM_2.5 concentrations. We find a strong positive relationship between vehicle trips reduced and associated reductions in PM_2.5 concentrations. Further, we estimate a mean gas price elasticity of approximately –0.3 in what we call a "high price variability environment." Incorporating these results, cost-benefit analysis suggests that the social net benefit for Cache Valley associated with the imposition of a seasonal gas tax during the winter-inversion season is highly dependent upon the type of benefit estimation method used.

Recommended Citation

Moscardini, L.A., Caplan, A.J. Controlling Episodic Air Pollution with a Seasonal Gas Tax: The Case of Cache Valley, Utah. Environ Resource Econ 66, 689–715 (2017). https://doi.org/10.1007/s10640-015-9968-z