WAREHOUSES, TRUCKS, AND PM

"The eastern Inland Empire of Southern California has experienced dramatic growth of the logistics industry since 2000. This paper analyzes the air pollution implications of that expansion. It is found that truck traffic will generate significant air pollution, especially PM 2.5 . The estimated excess mortality associated is 32-64 cases per year, with a combined excess mortality and morbidity value of $247-$455 million per year. This represents 44%-81% of the estimated wages generated by industry growth and $5 million-$9 million per distribution facility. These estimates suggest that policies should be developed to internalize those costs." Copyright No Claim to Original U.S. Government Works.

Vertical equity consequences of very high cigarette tax increases: If the poor are the ones smoking, how could cigarette tax increases be progressive?

Cigarette smoking is concentrated among low-income groups. Consequently, cigarette taxes are considered regressive. However, if poorer individuals are much more price sensitive than richer individuals, then tax increases would reduce smoking much more among the poor and their cigarette tax expenditures as a share of income would rise by much less than for the rich. Warner (2000) said this phenomenon would make cigarette tax increases progressive. We test this empirically. Among low-, middle-, and high-income groups, we estimate total price elasticities of _0.37, _0.35, and _0.20, respectively. We find that cigarette tax increases are not close to progressive, using both tax expenditure-based and traditional welfare measures. This finding is robust to cross-border purchasing, generic cigarettes, and substantial external effects. However, we find that taxes can be progressive under some behavioral economic models (Gruber & Koszegi, 2004) but that these may only apply to a small share of smokers. © 2008 by the Association for Public Policy Analysis and Management.