Saturday, June 23, 2007

All Right! Correcting Pigovian Taxes!

Interesting post about the real costs of driving:

Three possible externalities associated with driving are the following:
  • My driving increases congestion for other drivers;
  • I might crash into other cars or pedestrians;
  • My driving contributes to global warming.
If you had to guess, which of those three considerations provides the strongest justification for a bigger tax on gasoline?
In addition to answering the "so, ballpark, how much are we talking about per gallon?" question for carbon taxes, the post also suggests that the high-mileage/low-density greater metropolitan Smyrna motoring lifestyle may not be so inefficient compared to the low-mileage/slightly-higher-density Waltham one.

(Of course, certain Bronxians have us all beat on the efficiency scale....)


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