Corporate Average Fuel Economy Standards and the Market for New Vehicles
AbstractThis paper presents an overview of the economics literature on the effect of Corporate Average Fuel Economy (CAFE) standards on the new vehicle market. Since 1978, CAFE has imposed fuel economy standards for cars and light trucks sold in the U.S. market. This paper reviews the history of the standards, followed by a discussion of the major upcoming changes in implementation and stringency. It describes strategies that firms can use to meet the standards and reviews the CAFE literature as it applies to the new vehicle market. The paper concludes by highlighting areas for future research in light of the upcoming changes to CAFE.
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Bibliographic InfoPaper provided by Resources For the Future in its series Discussion Papers with number dp-10-68.
Date of creation: 21 Dec 2010
Date of revision:
CAFE; costs; structural estimation;
Other versions of this item:
- Thomas Klier & Joshua Linn, 2011. "Corporate Average Fuel Economy Standards and the Market for New Vehicles," Annual Review of Resource Economics, Annual Reviews, vol. 3(1), pages 445-462, October.
- Thomas H. Klier & Joshua Linn, 2011. "Corporate average fuel economy standards and the market for new vehicles," Working Paper Series WP-2011-01, Federal Reserve Bank of Chicago.
- Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
- L5 - Industrial Organization - - Regulation and Industrial Policy
This paper has been announced in the following NEP Reports:
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