Thursday, September 15

A Political Bias in Petrol Prices

The "Financial Methods" blog has an interesting post on state petrol taxes. The author observes the following correlation:
Looking at the 10 states with the highest gasoline taxes, there is 1 red state and 9 blue. Indiana is the red state with the highest gasoline taxes...Of the 10 states with the lowest gasoline taxes, the pattern reverses - 9 red states and 1 blue. New Jersey wins the prize for the blue state with the lowest gasoline taxes (at 14.5 cpg).
My guess: the correlation is largely explained by variations in population density in red vs. blue states. As the author (I think) says or suggests, there are probably valid reasons for adopting a relatively high petrol tax in an urban environment where congestion is an issue and public transport may be (more) widely available. Link

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