The Rebound Effect for Passenger Vehicles
AbstractIncreasingly stringent fuel economy standards will reduce per-mile driving costs and may raise vehicle miles traveled, which is referred to as the rebound effect. All previous estimates impose at least one of three behavioral assumptions: (a) fuel economy is uncorrelated with other vehicle attributes; (b) fuel economy is uncorrelated with attributes of other vehicles owned by the household; and (c) the effect of gasoline prices on vehicle miles traveled is inversely proportional to the effect of fuel economy. Relaxing these assumptions yields a large and robust rebound effect; a one percent fuel economy increase raises driving 0.2 to 0.4 percent.
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Bibliographic InfoPaper provided by Resources For the Future in its series Discussion Papers with number dp-13-19.
Date of creation: 08 Jul 2013
Date of revision:
fuel economy standards; passenger vehicles; vehicle miles traveled; household driving demand;
Other versions of this item:
- Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Costs; Distributional Effects; Employment Effects
- R22 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Other Demand
- R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-07-20 (All new papers)
- NEP-ENE-2013-07-20 (Energy Economics)
- NEP-TRE-2013-07-20 (Transport Economics)
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