Is Pay-as-You-Drive Insurance a Better Way to Reduce Gasoline than Gasoline Taxes?

摘要

Despite concerns about U.S. dependence on a volatile world oil market, greenhouse gases from fuel combustion, and air-quality effects of mobile source emissions, substantially higher federal gasoline taxes are currently a political nonstarter. Any fuel-conservation measures that might be more politically palatable are generally perceived as inferior toxgasoline taxes on efficiency grounds. This paper challenges the latter assertion: it shows that a policy that should be far more feasible than a large increase in fuel taxes can also achieve a significant reduction in fuel demand, with a dramatically larger welfare gain.