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Within-day variation in the rebound effect from fuel efficiency standards and implications for road congestion

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  • Nehiba, Cody

Abstract

Travel demand and congestion fluctuate throughout the day, but temporal heterogeneity in travel demand elasticities is often overlooked. I estimate within-day variation in the fuel economy elasticity of travel demand, illustrating the timing of the rebound effect — when higher fuel efficiency standards increase mileage by decreasing per-mile costs. Using multiple empirical strategies and data sets, I find that drivers are most elastic during peak demand periods that coincide with morning and evening commuting hours. Mode switching for shorter commute trips in areas with low-cost alternatives appears to drive much of the within-day heterogeneity. Further, accounting for temporal heterogeneity in the rebound effect has the potential to determine whether the congestion costs of a fuel economy improvement exceed the pollution benefits.

Suggested Citation

  • Nehiba, Cody, 2025. "Within-day variation in the rebound effect from fuel efficiency standards and implications for road congestion," Transportation Research Part A: Policy and Practice, Elsevier, vol. 199(C).
    • Handle: RePEc:eee:transa:v:199:y:2025:i:c:s0965856425002162
    DOI: 10.1016/j.tra.2025.104588
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    Keywords

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    JEL classification:

    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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