98/01985 On the use of modern asset pricing for comparing alternative royalty systems for petroleum development projects : Bradley, P. G. The Energy Journal, 1998, 19, (1), 47–81

• Publisher: Elsevier Science
• Year: 1998
• Weight: 206 KB
• Volume: 39
• Category: Article
• ISSN: 0140-6701
• DOI: 10.1016/s0140-6701(98)80188-4

✦ Synopsis

The effects of the proposed reduction in the excise tax on gasoline and diesel fuel on the US economy are investigated. Composed of 14 producing sectors, 14 consuming sectors, six household categories classified by income and a government, a computable general equilibrium model is employed. The effects of a 4.3 cents per gallon reduction in the excise tax on gasoline and diesel fuel on prices and quantities are examined. The results suggest, for example, a decrease in the tax would result in higher output by the producing sectors, an expansion in the consumption of goods and services and an increase in welfare. The government would realize a decrease in revenue of about $2.37 billion. With regard to the assumption of the values of the substitution elasticities, the results are reasonably robust when subjected to a sensitivity analysis.