Modeling an increase in the gas tax


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    IMPLAN Support
    Hi Alex, IMPLAN as a static Input-Output Model isn't really designed to look at elasticities, and we unfortunately don't have any elasticities we can offer you. However, if you want to make some assumptions on changes in spending you certainly can model your anticipated changes in IMPLAN. On what IMPLAN can do, you could certainly use IMPLAN to look at how the economy would be effected by injected 4BB dollars into infrastructure construction. If you can make estimates of how Households and business will change their spending habits, you can certainly look into modeling these types of changes as well. This has a number of caveats to it. Businesses may just pass higher costs on to consumers if the market will sustain it and they may not be impacted at all by the change, some business may see a reduction of profits (which are leakages) and others may see structural changes which could be modeled, or there may be a drive towards import substitution where and when possible. Likewise Households may spend more on gas, but less on other goods (thus a net 0 change), they may spend out of savings (a leakage) or they may change their habits and buying patterns. If you want to make some assumptions on these types of things, we can certainly assist you in modeling various assumptions. For example increased tax may drive decreased gas sales if users switch to alternative transportation modes, cease buying fuel for luxury items (such as motor boats), or travel shorter distances because of costs. So unfortunately to do this with IMPLAN there will be a lot of initial legwork for you. We would highly recommend contacting TREDIS as their specialty is transportation related Activities and they do have some elasticities in the Model (although I'm not sure if these would address the tax burden questions). However, they would certainly be able to assist you in modeling some of your more challenging traffic related impacts such as changes as a result of lessening congestion. Here is some additional information about TREDIS. 1. There certainly are studies that are done on these types of impacts, but we unfortunately do not keep a database of these and thus cannot recommend any at this time. 2. You can do an Industry Change to model the increase for construction of roads, however there is not direct way to increase the cost of a commodity in IMPLAN. 3. To do this you would also want to determine how you think these Industries and Households would react. Then based on those assumptions there are ways to model these assumptions in IMPLAN; however, they are not as straight forward as an Industry Change.
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