Reducing Gasoline Price Variability: A Modest Proposal

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The recent volatility of short-run gasoline prices in the United States has resulted in calls for the government to intervene. This paper details a simple means of reducing that variability, utilizing federal tax policies, without eliminating the signaling role of prices in the medium- to long-term. If properly implemented, the gyrations in gas prices could be largely removed, with little impact on the revenue that the federal government generates through taxation. If applied to the markets in nations that have significantly higher gasoline taxes, essentially all price volatility could be removed.


Copyright 2006.

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Publication Title

The Energy Journal

Published Citation

LeClair, Mark. 'Reducing Gasoline Price Variability: A Modest Proposal.' The Energy Journal 27.2 (2006): 41-54.

Peer Reviewed