Fuel Prices and New Vehicle Fuel Economy in Europe
AbstractThis paper evaluates the effect of fuel prices on new vehicle fuel economy in the eight largest European markets. The analysis spans the years 2002–2007 and uses detailed vehicle registration and specification data to control for policies, consumer preferences, and other potentially confounding factors. Fuel prices have a statistically significant effect on new vehicle fuel economy in Europe, but this estimated effect is much smaller than that for the United States. Within Europe, fuel economy responds more in the United Kingdom and France than in the other large markets. Overall, substantial changes in fuel prices would have relatively small effects on the average fuel economy of new vehicles sold in Europe. We find no evidence that diesel fuel prices have a large effect on the market share of diesel vehicles.
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Bibliographic InfoPaper provided by Resources For the Future in its series Discussion Papers with number dp-11-37.
Date of creation: 07 Sep 2011
Date of revision:
fuel prices; fuel economy; new vehicles; Europe;
Other versions of this item:
- Thomas Klier & Joshua Linn, 2011. "Fuel Prices and New Vehicle Fuel Economy in Europe," Working Papers 1117, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
- NEP-ALL-2012-01-03 (All new papers)
- NEP-ENE-2012-01-03 (Energy Economics)
- NEP-EUR-2012-01-03 (Microeconomic European Issues)
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