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Fuel Economy and Safety: The Influences of Vehicle Class and Driver Behavior

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  • Mark R. Jacobsen

Abstract

Fuel economy standards change the composition of the vehicle fleet, potentially influencing accident safety. I introduce a model of the fleet that captures risks across interactions between vehicle types while simultaneously recovering estimates of unobserved driving safety behavior. The model importantly includes the ability to consider the selection of driver types across vehicles. I apply the model to the present structure of U.S. fuel economy standards and find an adverse effect on safety: Each MPG increment to the standard results in an additional 149 fatalities per year in expectation. I next show how two alternative regulatory provisions, including one slated to enter effect next year, can fully offset the negative safety consequences; minor changes in the regulation produce a robust, near-zero change in accident fatalities while conserving the same quantity of gasoline.

Suggested Citation

  • Mark R. Jacobsen, 2012. "Fuel Economy and Safety: The Influences of Vehicle Class and Driver Behavior," NBER Working Papers 18012, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:18012
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    References listed on IDEAS

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    1. Antonio M. Bento & Lawrence H. Goulder & Mark R. Jacobsen & Roger H. von Haefen, 2009. "Distributional and Efficiency Impacts of Increased US Gasoline Taxes," American Economic Review, American Economic Association, vol. 99(3), pages 667-699, June.
    2. Austin, David & Dinan, Terry, 2005. "Clearing the air: The costs and consequences of higher CAFE standards and increased gasoline taxes," Journal of Environmental Economics and Management, Elsevier, vol. 50(3), pages 562-582, November.
    3. Michael L. Anderson & Maximilian Auffhammer, 2014. "Pounds That Kill: The External Costs of Vehicle Weight," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(2), pages 535-571.
    4. Ted Gayer, 2004. "The Fatality Risks of Sport-Utility Vehicles, Vans, and Pickups Relative to Cars," Journal of Risk and Uncertainty, Springer, vol. 28(2), pages 103-133, March.
    5. Evans, L., 2001. "Causal influence of car mass and size on driver fatality risk," American Journal of Public Health, American Public Health Association, vol. 91(7), pages 1076-1081.
    6. Steven D. Levitt & Jack Porter, 2001. "How Dangerous Are Drinking Drivers?," Journal of Political Economy, University of Chicago Press, vol. 109(6), pages 1198-1237, December.
    7. White, Michelle J, 2004. "The "Arms Race" on American Roads: The Effect of Sport Utility Vehicles and Pickup Trucks on Traffic Safety," Journal of Law and Economics, University of Chicago Press, vol. 47(2), pages 333-355, October.
    8. Peltzman, Sam, 1975. "The Effects of Automobile Safety Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 677-725, August.
    9. Andrew N. Kleit, 2004. "Impacts of Long-Range Increases in the Fuel Economy (CAFE) Standard," Economic Inquiry, Western Economic Association International, vol. 42(2), pages 279-294, April.
    10. Alma Cohen & Liran Einav, 2003. "The Effects of Mandatory Seat Belt Laws on Driving Behavior and Traffic Fatalities," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 828-843, November.
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    Cited by:

    1. Liu, Yizao, 2017. "Safer or cheaper? Traffic safety, vehicle choices and the effect of new corporate average fuel economy standards," Resource and Energy Economics, Elsevier, vol. 49(C), pages 99-112.
    2. Ullman, Darin F., 2016. "A difficult road ahead: Fleet fuel economy, footprint-based CAFE compliance, and manufacturer incentives," Energy Economics, Elsevier, vol. 57(C), pages 94-105.

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    More about this item

    JEL classification:

    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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