Gasoline Prices and U.S. - Mexico Border Crossing

Presented by the METRANS transportation center based at USC and CSULB featuring Cen Feng Ng, assistant professor of economics at California State University Long Beach.

Gasoline prices vary wildly throughout the world, with some countries imposing high taxes while others provide subsidies. After examining worldwide price differences in detail, this paper focuses on whether the differences in gasoline price affects border crossings between the U.S. and Mexico, which currently subsidizes gasoline. This paper finds that even though there is evidence that some U.S. residents may be incentivized to visit Mexico when the price difference is large, this is offset by the decrease in travel due to higher U.S. gasoline prices. Control variables include State Department travel warnings, the unemployment rate and other factors. The results also suggest that there is some substitution between modes, as an increase in gasoline prices is associated with an increase in pedestrian border crossings.

Chen Feng Ng received her Ph.D. from UC Irvine in 2008, and her main fields of interest are urban and transportation economics. Her papers have been published in the Journal of Urban Economics and Transportation - as well as other journals. She is currently working on research related to highway design, gasoline subsidies, and the link between housing prices and consumption amenities.