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Fuel Economy Rebound Effect for U.S. Household Vehicles

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  • David L. Greene
  • James R. Kahn
  • Robert C. Gibson

Abstract

This paper presents an econometric estimation of the "rebound effect" for household vehicle travel in the United States based on analysis of survey data collected by the Energy Information Administration (ELA) at approximately threeyear intervals over a 15-year period. The rebound effect measures the tendency to "take back" potential energy savings from fuel economy improvements as increased travel. Vehicle use models were estimated for one-, two-, three-, four-, and five-vehicle households. The results confirm recent estimates based on national or state-level data: a long-run "take back" of about 20 percent of potential energy savings. Consumer responses to changes in fuel economy or fuel price per gallon appear to be equal and opposite in sign. Recognizing the interdependencies among miles of travel, fuel economy and price is key to obtaining meaningful results.

Suggested Citation

  • David L. Greene & James R. Kahn & Robert C. Gibson, 1999. "Fuel Economy Rebound Effect for U.S. Household Vehicles," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 1-31.
    • Handle: RePEc:aen:journl:1999v20-03-a01
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    References listed on IDEAS

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    1. J. Daniel Khazzoom, 1980. "Economic Implications of Mandated Efficiency in Standards for Household Appliances," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 21-40.
    2. Clifton T Jones, 1993. "Another Look at U.S. Passenger Vehicle Use and the 'Rebound' Effect from Improved Fuel Efficiency," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 99-110.
    3. Golob, Thomas F. & Kim, Seyoung & Ren, Weiping, 1996. "How Households Use Different Types of Vehicles: A Structural Driver Allocation and Usage Model," University of California Transportation Center, Working Papers qt6xx6j51x, University of California Transportation Center.
    4. David L. Greene, 1992. "Vehicle Use and Fuel Economy: How Big is the "Rebound" Effect?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 117-144.
    5. David L. Greene, 1990. "CAFE OR PRICE?: An Analysis of the Effects of Federal Fuel Economy Regulations and Gasoline Price on New Car MPG, 1978-89," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 37-58.
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    JEL classification:

    • F0 - International Economics - - General

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