The Skinny on a Gas Tax

There has been much debate about the best policies for reducing carbon emissions. The most common refrain heard from economists is simply that incentives matter: if gas prices increase, people will consume less gasoline (by driving less), and alternative fuels will become more feasible substitutes (by having a more competitive price).

While an increase in the gas tax remains a point of contention, not only among economists, but also among politicians and policy wonks, now supporters of a gas tax have another reason to offer to strengthen their argument: an increase in the price of gas will most likely lead to a less obese population.

In a recent research paper, Charles Courtemanche, an economist at the University of Washington, St. Louis, provides the empirical support. He writes,

“A causal relationship between gasoline prices and obesity is possible through mechanisms of increased exercise and decreased eating in restaurants. I use a fixed effects model to explore whether this theory has empirical support, finding that an additional $1 in real gasoline prices would reduce obesity in the U.S. by 15% after five years, and that 13% of the rise in obesity between 1979 and 2004 can be attributed to falling real gas prices during this period. I also provide evidence that the effect occurs both by increasing exercise and by lowering the frequency with which people eat at restaurants.”