Residents, recreationists, ridge regression, and revenues:the five r's of florida's motor- tax

Abstract

Ridge regression is applied to the question of how to revise Florida's motor-fuel tax to remedy the shortfall of its transportation revenues. Along the way a model of gasoline consumption by residents and tourists is presented, and the differences in consumption patterns between the two types of purchasers are reported.

Keywords:

• baseline
• gasoline
• income elasticity
• multicollinearity
• price elasticity
• revenue shortfall
• ridge trace
• state finance
• tourism
• transportation