HOW FAR FOR A BUCK? TAX DIFFERENCES AND THE LOCATION OF RETAIL GASOLINE ACTIVITY IN SOUTHEAST CHICAGOLAND

被引:25
作者
Manuszak, Mark D. [1 ]
Moul, Charles C. [2 ]
机构
[1] Fed Reserve Board Governors, Washington, DC USA
[2] Miami Univ, Oxford, OH 45056 USA
关键词
COMPETITION; MARKETS; PRICES; INDUSTRIES; ENTRY;
D O I
10.1162/rest.91.4.744
中图分类号
F [经济];
学科分类号
02 ;
摘要
We exploit variation in gasoline and cigarettes taxes in adjacent political jurisdictions for northern Illinois and Indiana to examine consumers' trade-off between prices and travel. We develop a model that relates activity in the retail gasoline industry around the tax borders to consumer locations. Our results indicate that the willingness of a typical Chicagoland consumer to travel an additional mile to buy gasoline corresponds to about $0.065 to $0.084 per gallon. According to our estimates, the observed area of Chicago, the jurisdiction with the highest taxes, is missing approximately 40% of the capacity that would exist were taxes equalized.
引用
收藏
页码:744 / 765
页数:22
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