@techreport{NBERw9152,
 title = "Estimates from a Consumer Demand System: Implications for the Incidence of Environmental Taxes",
 author = "Sarah E. West and Roberton C. Williams III",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "9152",
 year = "2002",
 month = "September",
 URL = "http://www.nber.org/papers/w9152",
 abstract = {Most studies suggest that environmental taxes are regressive, and thus are unattractive policy options. We consider the distributional effects of a gasoline tax increase using three welfare measures and under three scenarios for gas tax revenue use. To incorporate behavioral responses we use Consumer Expenditure Survey data to estimate a consumer demand system that includes gasoline, other goods, and leisure. We find that the gas tax is regressive, but that returning the revenue through a lump-sum transfer more than offsets this, yielding a net increase in progressivity. We also find that ignoring behavioral changes in distributional calculations overstates both the overall burden of the tax and its regressivity.},
}