Does Britain or the United States Have the Right Gasoline Tax?

This paper develops an analytical framework for assessing the second-best optimal level of gasoline taxation, taking into account unpriced pollution, congestion, and accident externalities and interactions with the broader fiscal system. We provide calculations of the optimal taxes for the United States and the United Kingdom under a wide variety of parameter scenarios, with the gasoline tax substituting for a distorting tax on labor income. Under our central parameter values, the second-best optimal gasoline tax is $1.01 per gallon for the United States and$1.34 per gallon for the United Kingdom. These values are moderately sensitive to alternative parameter assumptions. The congestion externality is the largest component in both nations, and the higher optimal tax for the United Kingdom is due mainly to a higher assumed value for marginal congestion cost. Revenue-raising needs, incorporated in a “Ramsey” component, also play a significant role, as do accident externalities and local air pollution. The current gasoline tax in the United Kingdom ($2.80 per gallon) is more than twice this estimated optimal level. Potential welfare gains from reducing it are estimated at nearly one-fourth the production cost of gasoline used in the United Kingdom. Even larger gains in the United Kingdom can be achieved by switching to a tax on vehicle miles with equal revenue yield. For the United States, the welfare gains from optimizing the gasoline tax are smaller, but those from switching to an optimal tax on vehicle miles are very large.gasoline tax, pollution, congestion, accidents, fiscal interactions

Should Urban Transit Subsidies Be Reduced?

This paper derives intuitive and empirically useful formulas for the optimal pricing of passenger transit and for the welfare effects of adjusting current fare subsidies, for peak and off-peak urban rail and bus systems. The formulas are implemented based on a detailed estimation of parameter values for the metropolitan areas of Washington (D.C.), Los Angeles, and London. Our analysis accounts for congestion, pollution, and accident externalities from automobiles and from transit vehicles; scale economies in transit supply; costs of accessing and waiting for transit service as well as service crowding costs; and agency adjustment of transit frequency, vehicle size, and route network to induced changes in demand for passenger miles. The results support the efficiency case for the large fare subsidies currently applied across mode, period, and city. In almost all cases, fare subsidies of 50 percent or more of operating costs are welfare improving at the margin, and this finding is robust to alternative assumptions and parameters.transit subsidies, scale economies, traffic congestion, welfare effects

Should Urban Transit Subsidies Be Reduced?

This paper derives intuitive and empirically useful formulas for the optimal pricing of passenger transit and for the welfare effects of adjusting current fare subsidies, for peak and off-peak urban rail and bus systems. The formulas are implemented based on a detailed estimation of parameter values for the metropolitan areas of Washington (D.C.), Los Angeles, and London. Our analysis accounts for congestion, pollution, and accident externalities from automobiles and from transit vehicles; scale economies in transit supply; costs of accessing and waiting for transit service as well as service crowding costs; and agency adjustment of transit frequency, vehicle size, and route network to induced changes in demand for passenger miles. The results support the efficiency case for the large fare subsidies currently applying across mode, period, and city. In almost all cases, fare subsidies of 50% or more of operating costs are welfare improving at the margin, and this finding is robust to alternative assumptions and parameters.Transit subsidies; Scale economies; Traffic congestion; Welfare effects

Social welfare analysis of investment public-private partnership approaches for tansportation projects

This paper has two objectives: (1) to introduce a new approach to gaining widespread support for comprehensive road pricing; and (2) to develop a detailed social welfare analysis for road pricing schemes. We first describe a new approach to garnering support for system-wide road pricing, which we refer to as an investment public-private partnership, or IP3. This approach returns a significant portion of the economic value created by road pricing back to its citizen-owners. Next, we present a social welfare framework that estimates the benefits and costs of using the IP3 approach on an urban transportation network. Policy makers typically evaluate public-private partnership (P3) projects using Value for Money (VfM) analysis. However, a P3 project's impact on overall social welfare provides a more comprehensive evaluation criterion. Apart from several theoretical studies, a detailed social welfare analysis that includes all major P3 project stakeholders is lacking. Using Fresno City's transportation system as our case study, we show that system-optimal tolling scenarios favor average users, but that government¿and consequently taxpayers¿would pay for costly tolling systems. In contrast, unlimited profit-maximizing tolls raise substantial profits for government, for the infrastructure's citizen-owners, and for the private sector, but the average user is worse off. From a social welfare perspective, one should search for a Pareto-improvement under which all major stakeholders are better off. Our estimates indicate that a mixed private and public tolling scheme offers such an improvement. A mixed scheme results in the highest social welfare among all scenarios unless the weight placed on motorists' (i.e., transportation users') welfare is very low or the weight placed on residents' welfare is very high relative to the weight of other stakeholders

Welfare effects of distortionary fringe benefits taxation: The case of employer-provided cars

In Europe, many employees receive company cars as fringe benefits induced by taxation. We analyze the welfare effects of company car taxation for the Netherlands by estimating to what extent car expenditure and private car travel change when employees receive a company car. Tax treatment of company cars generates an annual welfare loss, ranging from €600 to €780 per company car, mainly due to a shift toward more expensive cars (from €420 to €600), but also due to increased private travel (€180). For the whole of Europe, the annual welfare loss is about €12 billion. © (2011) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association

Telephone based self-management support by 'lay health workers' and 'peer support workers' to prevent and manage vascular diseases: a systematic review and meta-analysis

Background: Improved prevention and management of vascular disease is a global priority. Non-health care professionals (such as, ‘lay health workers’ and ‘peer support workers’) are increasingly being used to offer telephone support alongside that offered by conventional services, to reach disadvantaged populations and to provide more efficient delivery of care. However, questions remain over the impact of such interventions, particularly on a wider range of vascular related conditions (such as, chronic kidney disease), and it is unclear how different types of telephone support impact on outcome. This study assessed the evidence on the effectiveness and cost-effectiveness of telephone self-management interventions led by ‘lay health workers’ and ‘peer support workers’ for patients with vascular disease and long-term conditions associated with vascular disease. Methods: Systematic review of randomised controlled trials. Three electronic databases were searched. Two authors independently extracted data according to the Cochrane risk of bias tool. Random effects meta-analysis was used to pool outcome measures. Results: Ten studies were included, primarily based in community settings in the United States; with participants who had diabetes; and used ‘peer support workers’ that shared characteristics with patients. The included studies were generally rated at risk of bias, as many methodological criteria were rated as ‘unclear’ because of a lack of information. Overall, peer telephone support was associated with small but significant improvements in self-management behaviour (SMD = 0.19, 95% CI 0.05 to 0.33, I2 = 20.4%) and significant reductions in HbA1c level (SMD = -0.26, 95% CI −0.41 to −0.11, I2 = 47.6%). There was no significant effect on mental health quality of life (SMD = 0.03, 95% CI −0.12 to 0.18, I2 = 0%). Data on health care utilisation were very limited and no studies reported cost effectiveness analyses. Conclusions: Positive effects were found for telephone self-management interventions via ‘lay workers’ and ‘peer support workers’ for patients on diabetes control and self-management outcomes, but the overall evidence base was limited in scope and quality. Well designed trials assessing non-healthcare professional delivered telephone support for the prevention and management of vascular disease are needed to identify the content of effective components on health outcomes, and to assess cost effectiveness, to determine if such interventions are potentially useful alternatives to professionally delivered care