Question A:
The release of strategic oil reserves announced by the International Energy Agency will deliver substantially lower US gasoline prices at the pump over the next six months than would otherwise have been the case.
Responses
Responses weighted by each expert's confidence
Question B:
Assuming that world oil prices over the next six months continue to be elevated and volatile, temporarily suspending the federal gasoline tax would deliver substantially lower gas prices at the pump than otherwise over that period.
Responses
Responses weighted by each expert's confidence
Question C:
A temporary cap on US gasoline prices would substantially lower prices at the pump over the next six months without creating scarcity.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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 Daron Acemoglu |
MIT | Bio/Vote History | ||
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 Mark Aguiar |
Princeton | Bio/Vote History | ||
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 Joseph Altonji |
Yale | Bio/Vote History | ||
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 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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 Abhijit Banerjee |
MIT | Did Not Answer | Bio/Vote History | |
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 Dirk Bergemann |
Yale | Bio/Vote History | ||
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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 Judith Chevalier |
Yale | Bio/Vote History | ||
 David Cutler |
Harvard | Bio/Vote History | ||
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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Substantial over one month, yes. But for six months, no. Normal daily Hormuz flow, about 20 m per day, is far more than 400 m/180 days. Moreover, "disagree" would also be right if one thinks Hormuz will open within, say, one month. Furthermore, other sources will come on line.
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 Aaron Edlin |
Berkeley | Did Not Answer | Bio/Vote History | |
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Over the next six months?
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 Liran Einav |
Stanford | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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 Edward Glaeser |
Harvard | Bio/Vote History | ||
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 Pinelopi Goldberg |
Yale | Did Not Answer | Bio/Vote History | |
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 Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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 Oliver Hart |
Harvard | Bio/Vote History | ||
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 Caroline Hoxby |
Stanford | Bio/Vote History | ||
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 Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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 Erik Hurst |
Chicago Booth | Bio/Vote History | ||
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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These reserves can help avoid short-term spikes in oil prices. If Trump's war causes major oil price hikes over the next six months, those reserves won't help much.
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 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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until it runs out, if the turmoil lasts all the way through the summer.
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 Pete Klenow |
Stanford | Bio/Vote History | ||
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SPR releases will be modest relative to the ~100 million barrels/day global market
-see background information here |
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 Jonathan Levin |
Stanford | Bio/Vote History | ||
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 Eric Maskin |
Harvard | Did Not Answer | Bio/Vote History | |
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 William Nordhaus |
Yale | Bio/Vote History | ||
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 Maurice Obstfeld |
Peterson Institute for International Economics | Bio/Vote History | ||
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 Parag Pathak |
MIT | Did Not Answer | Bio/Vote History | |
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 Larry Samuelson |
Yale | Bio/Vote History | ||
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The 400 million barrels to be released is small compared to total world oil consumption (about 100 million barrels per day).
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 José Scheinkman |
Columbia University | Bio/Vote History | ||
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Though the low price-elasticity of demand indicates that, all other things equal, price should react strongly to the announced reserves release, expectations of the war outlasting strategic reserves should increase storage, limiting the temporary price-effects.
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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Doesn't seem large enough.
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 Fiona Scott Morton |
Yale | Bio/Vote History | ||
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volume is too small
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 Carl Shapiro |
Berkeley | Bio/Vote History | ||
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 Robert Shimer |
University of Chicago | Bio/Vote History | ||
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 Stefanie Stantcheva |
Harvard | Did Not Answer | Bio/Vote History | |
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 James Stock |
Harvard | Bio/Vote History | ||
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Back of envelope: shortfall from a 40 day closure = 40 days x 20mbbl/d = 800mbbl. Coordinated release = 400mbbl (IEA). Timing matters but oil is durable and storable. So, reduction in oil price shock of 1/2. More or less.
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 Nancy Stokey |
University of Chicago | Bio/Vote History | ||
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 Chad Syverson |
Chicago Booth | Bio/Vote History | ||
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Announced 400m bbl release is about 3 weeks of oil through Strait of Hormuz. Doesn't seem like much given expected disruption, but OTOH small actual movements do seem to move prices sometimes. Maybe it would work as a signal of future releases.
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 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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 Christopher Udry |
Northwestern | Bio/Vote History | ||
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They are just too small to have a substantial effect.
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 Ivan Werning |
MIT | Bio/Vote History | ||
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172m barrels over 4m~=7% of US consumption, not trivial can lower price vs counterfactual, even if small relative to rise. But if global oil shock is persistent, prices are forward looking so effect may be small (plus planned replenishing of reserves)
—> not clearly substantial.
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Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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But that doesn't mean that this is necessarily good policy.
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Mark Aguiar |
Princeton | Bio/Vote History | ||
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Joseph Altonji |
Yale | Bio/Vote History | ||
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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Not substantially. The tax is $0.18 per gallon. That's about 5% of the current price. That's not substantial. And this assumes generously that all of the incidence goes to the consumer.
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Abhijit Banerjee |
MIT | Did Not Answer | Bio/Vote History | |
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Dirk Bergemann |
Yale | Bio/Vote History | ||
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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Judith Chevalier |
Yale | Bio/Vote History | ||
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Magnitude of tax is 18 cents per gallon so measurable.
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David Cutler |
Harvard | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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Even if the price is not elevated, ditching the 18 cent-per-gallon gas tax lowers the price by about 18 cents, assuming the GE effect is small, which seems right. So, this just comes down to whether 18 cents is "substantial". I guess so, but that's just me.
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Aaron Edlin |
Berkeley | Did Not Answer | Bio/Vote History | |
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Small potatoes.
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Edward Glaeser |
Harvard | Bio/Vote History | ||
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Pinelopi Goldberg |
Yale | Did Not Answer | Bio/Vote History | |
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Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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Oliver Hart |
Harvard | Bio/Vote History | ||
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Caroline Hoxby |
Stanford | Bio/Vote History | ||
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A classic tax incidence question. Literature on incidence of(relatively stable) federal gas tax indicates burden is divided between wholesalers & consumers. However, temporary gas tax suspensions (which rely on state, not fed, var'n) have different incidence. So low confidence.
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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Erik Hurst |
Chicago Booth | Bio/Vote History | ||
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Federal gas taxes are relatively small. A suspension may decrease gas prices by about 10-15 cents/gallon
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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The Federal gas tax is less than 19 cents/gallon. Suspending it cannot cancel even the increase in the last two weeks.
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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This is mechanical, not an endorsement of the idea
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Pete Klenow |
Stanford | Bio/Vote History | ||
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The federal gas tax is only 18.4 cents/gallon
-see background information here |
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Eric Maskin |
Harvard | Did Not Answer | Bio/Vote History | |
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William Nordhaus |
Yale | Bio/Vote History | ||
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Maurice Obstfeld |
Peterson Institute for International Economics | Bio/Vote History | ||
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Parag Pathak |
MIT | Did Not Answer | Bio/Vote History | |
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Larry Samuelson |
Yale | Bio/Vote History | ||
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Suspending the federal tax, and assuming (perhaps incorrectly) no compensating price increase from suppliers, will reduce the price of a gallon of gas by 18.4 cents, which is unlikely to be enough to prompt a significant behavioral response.
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José Scheinkman |
Columbia University | Bio/Vote History | ||
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In the short run, any decrease in price to final users would have to be supported by lowering the amount of oil storage in regions where transport is not affected by the war, what would depend on expectations on the duration of the war.
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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Suspending the tax will clearly lower prices.
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Fiona Scott Morton |
Yale | Bio/Vote History | ||
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Carl Shapiro |
Berkeley | Bio/Vote History | ||
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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Stefanie Stantcheva |
Harvard | Did Not Answer | Bio/Vote History | |
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James Stock |
Harvard | Bio/Vote History | ||
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Strong evidence of complete pass-through of costs in highly competitive retail gasoline market. Gas tax = $0.184/gal. To consumers, that is "substantial". Of course, this doesn't make it good policy (it is not).
-see background information here -see background information here -see background information here |
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Nancy Stokey |
University of Chicago | Bio/Vote History | ||
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Chad Syverson |
Chicago Booth | Bio/Vote History | ||
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Evidence seems to say pass-through rate of gas tax is high (consistent with inelastic demand), so dropping gas tax would probably show up as lower prices. This isn't to say it is necessarily a good idea, however.
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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To a first approximation, the incidence of the gas tax is on consumers (the supply is pretty elastic at the world price), so prices would go down by 15 to 18 cents per gallon. Is that substantial?
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Ivan Werning |
MIT | Bio/Vote History | ||
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Federal tax ~18c per gallon. For given local oil prices It lowers the costs of supplying gasoline and tends to reduce prices for consumers. In very short effects may be somewhat smaller, but passthrough has been shown to be high.
Note: Subjective if 18c is significant.
-see background information here |
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Question C Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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It would most likely need to be accompanied with some rationing
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Mark Aguiar |
Princeton | Bio/Vote History | ||
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Joseph Altonji |
Yale | Bio/Vote History | ||
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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As before, the upper bound reduction is 5% of the price. This cannot be very consequential even in the best case scenario.
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Abhijit Banerjee |
MIT | Did Not Answer | Bio/Vote History | |
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Dirk Bergemann |
Yale | Bio/Vote History | ||
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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Judith Chevalier |
Yale | Bio/Vote History | ||
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David Cutler |
Harvard | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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Depends of course on the cap. If it's barely binding, the effect is small. I'm assuming the government would make it big enough to matter. So, scarcity is expected.
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Aaron Edlin |
Berkeley | Did Not Answer | Bio/Vote History | |
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Without creating scarcity?
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Edward Glaeser |
Harvard | Bio/Vote History | ||
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Pinelopi Goldberg |
Yale | Did Not Answer | Bio/Vote History | |
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Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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Oliver Hart |
Harvard | Bio/Vote History | ||
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Caroline Hoxby |
Stanford | Bio/Vote History | ||
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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Erik Hurst |
Chicago Booth | Bio/Vote History | ||
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Price caps never work.
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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details will matter, a poorly designed policy could lead to scarcity
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Eric Maskin |
Harvard | Did Not Answer | Bio/Vote History | |
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William Nordhaus |
Yale | Bio/Vote History | ||
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Maurice Obstfeld |
Peterson Institute for International Economics | Bio/Vote History | ||
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Parag Pathak |
MIT | Did Not Answer | Bio/Vote History | |
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Larry Samuelson |
Yale | Bio/Vote History | ||
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If enough oil flows that there will be no scarcity, then price increases would be modest without a cap. If prices would otherwise increase significantly, then the cap will lead to market imbalance.
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José Scheinkman |
Columbia University | Bio/Vote History | ||
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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Impact on expectations unclear.
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Fiona Scott Morton |
Yale | Bio/Vote History | ||
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Carl Shapiro |
Berkeley | Bio/Vote History | ||
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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Stefanie Stantcheva |
Harvard | Did Not Answer | Bio/Vote History | |
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James Stock |
Harvard | Bio/Vote History | ||
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It is hard to see how this would work. Retailers operate on very thin margins. Who would be selling at a loss?
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Nancy Stokey |
University of Chicago | Bio/Vote History | ||
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Chad Syverson |
Chicago Booth | Bio/Vote History | ||
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I'm so old I remember the last time we tried this stupid idea.
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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If the cap is sufficient to lower prices substantially, there will be shortages or a black market.
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Ivan Werning |
MIT | Bio/Vote History | ||
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On its own surely not, as theory and history show, in the US in the past and more recently in other countries. Combined with pressure or incentives on suppliers, possibly, but unlikely.
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