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Vehicle miles (not) traveled: Fuel economy requirements, vehicle characteristics, and household driving

Author

Listed:
  • West, Jeremy
  • Hoekstra, Mark
  • Meer, Jonathan
  • Puller, Steven L

Abstract

A major concern with addressing the negative externalities of gasoline consumption by regulating fuel economy, rather than increasing fuel taxes, is that households respond by driving more. This paper exploits a discrete threshold in the eligibility for Cash for Clunkers to show that fuel economy restrictions lead households to purchase vehicles that have lower cost-per-mile, but are also smaller and lower-performance. Whereas the former effect can increase driving, the latter effect can reduce it. Results indicate that these households do not drive more, suggesting that behavioral responses do not necessarily undermine the effectiveness of fuel economy restrictions at reducing gasoline consumption.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • West, Jeremy & Hoekstra, Mark & Meer, Jonathan & Puller, Steven L, 2017. "Vehicle miles (not) traveled: Fuel economy requirements, vehicle characteristics, and household driving," Santa Cruz Department of Economics, Working Paper Series qt7bt7h69f, Department of Economics, UC Santa Cruz.
    • Handle: RePEc:cdl:ucscec:qt7bt7h69f
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    References listed on IDEAS

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    JEL classification:

    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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