The Irreversible Output Effects of Severance Taxes on Oil  

Oleh:

Brandly, Mark ; Barnett, A. H.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: Public Finance Review vol. 27 no. 5 (Sep. 1999), page 511-530.
Fulltext: 511PFR275.pdf (81.08KB)

Isi artikel

This article explains why the output effect of a severance tax on oil is not generally reversed when the tax is removed. It is shown that this severance-tax-induced irreversibility in supply has important implications for both the interpretation and estimation of the supply of oil. Specifically, severance taxes cause a path dependence in supply that makes the concept of a supply curve for oil ambiguous. The authors provide estimates for the case of Kansas that indicate that the magnitude of the irreversible effects of severance taxes is large.

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