| Summary: | 碩士 === 中原大學 === 國際貿易研究所 === 94 === The globalization of world trade has leveled motor vehicle price all over the world to such an extent that the price ratio for equivalent vehicles no longer exceeds about 1 to 2 between any two countries. However, transport gasoline price in different countries still differ on a scale of as much as 1 to 150. This paper examines a number of considerations from the theory of public finance that may explain these differences and explores empirically the factors that contribute to these differences.
Theoretically, we found that differential tax policies between counties are the main reason that causes the difference in gasoline price among different countries. Empirically, by using the data set containing gasoline prices for 17 countries (15 EU, US, and Taiwan) spanning from 1999 to 2004, and by applying fixed effect model with FGLS estimation method, we found that the factors that contribute to the significant differences in gasoline price include government expenditure, government debt, income, as well as car density and road casualties. Environmental situations ( emissions) and the dependency in imported oil are also found to be significant factors that may cause the gasoline price to differ.
The results from our empirical analysis suggest that raising gasoline price may improve the quality of the environment to some extent, which indicates that designing suitable policy for gasoline price should be a good way of achieving sustainability of the economy.
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