This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

American Economic Review: Vol. 104 No. 5 (May 2014)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter

Explore:

AER - All Issues

AER Forthcoming Articles

The Economic Cost of Global Fuel Subsidies

Article Citation

Davis, Lucas W. 2014. "The Economic Cost of Global Fuel Subsidies." American Economic Review, 104(5): 581-85.

DOI: 10.1257/aer.104.5.581

Abstract

By 2015, global oil consumption will reach 90 million barrels per day. In part, this high level of consumption reflects the fact that many countries provide subsidies for gasoline and diesel. This paper examines global fuel subsidies using the latest available data from the World Bank, finding that road-sector subsidies for gasoline and diesel totaled $110 billion in 2012. Pricing fuels below cost is inefficient because it leads to overconsumption. Under baseline assumptions about supply and demand elasticities, the total annual deadweight loss worldwide is $44 billion. Incorporating external costs increases the economic costs substantially.

Article Full-Text Access

Full-text Article

Additional Materials

Online Appendix (205.32 KB) | Download Data Set (424.09 KB) | Author Disclosure Statement(s) (16.25 KB)

Authors

Davis, Lucas W. (U CA, Berkeley)

JEL Classifications

Q31: Nonrenewable Resources and Conservation: Demand and Supply; Prices
Q35: Hydrocarbon Resources
Q38: Nonrenewable Resources and Conservation: Government Policy


American Economic Review


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AER - All Issues

AER - Forthcoming Articles

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us