Controlling Episodic Air Pollution with a Seasonal Gas Tax: The Case of Cache Valley,Utah

Using daily data spanning 10 years, we establish a statistical relationship between episodic particulate-matter \((\hbox {PM}_{2.5})\) concentrations and vehicle trips in Cache Valley, Utah, and estimate an average gas-price elasticity for the region. We also estimate the benefits and costs associated with a seasonal gas tax set to reduce vehicle trips during the winter-inversion season and thereby lower health costs through concomitant decreases in the \(\hbox {PM}_{2.5}\) concentrations. We find a strong positive relationship between vehicle trips reduced and associated reductions in \(\hbox {PM}_{2.5}\) concentrations. Further, we estimate a mean gas price elasticity of approximately \(-\)0.3 in what we call a “high price variability environment.” Incorporating these results, cost-benefit analysis suggests that the social net benefit for Cache Valley associated with the imposition of a seasonal gas tax during the winter-inversion season is highly dependent upon the type of benefit estimation method used.     

Economics of advertising: Emerging functions of Internet advertising

This paper intends to highlight the emerging force of the Internet as an advertising medium. The economic functions of Internet advertising are examined. Moreover, the paper aims to evaluate the relative impacts on optimal advertising models. Our discussion also includes analysis of associated price-cost margins with respect to optimal advertising budgets and strategic reactions. All in all, this paper should provide entrepreneurs with more crucial knowledge of advertising strategies offered by the new medium. Moreover, it will equip scientists and technologists with more insights into the economic aspects and strategic values of Internet advertising. This revised version was published online in August 2006 with corrections to the Cover Date.