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The Effects of the Corporate Average Fuel Efficiency Standards in the US


  • Pinelopi Koujianou Goldberg


This paper examines the effects of the Corporate Average Fuel Economy Standards (CAFE) on automobile sales, prices, and fuel consumption. First a discrete choice model of automobile demand and a continuous model of vehicle utilization are estimated using micro data from the Consumer Expenditure Survey for 1984–1990. Next, the demand side model is combined with a model of oligopoly and product differentiation on the supply side. With these elements in place, the effects of the CAFE regulation are assessed through simulations, and compared to the effects of alternative policy instruments, such as an increase in gasoline tax.

Suggested Citation

  • Pinelopi Koujianou Goldberg, 1998. "The Effects of the Corporate Average Fuel Efficiency Standards in the US," Journal of Industrial Economics, Wiley Blackwell, vol. 46(1), pages 1-33, March.
  • Handle: RePEc:bla:jindec:v:46:y:1998:i:1:p:1-33
    DOI: 10.1111/1467-6451.00059

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