Corporate average fuel economy standards and the market for new vehicles
This paper presents an overview of the economics literature on the effect of Corporate Average Fuel Economy (CAFE) standards on the new vehicle market. Since 1978, CAFE has imposed fuel economy standards for cars and light trucks sold in the U.S. market. This paper reviews the history of the standards, followed by a discussion of the major upcoming changes in implementation and stringency. It describes strategies that firms can use to meet the standards and reviews the CAFE literature as it applies to the new vehicle market. The paper concludes by highlighting areas for future research in light of the upcoming changes to CAFE.
|Date of creation:||2011|
|Date of revision:|
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- Thomas H. Klier & Joshua Linn, 2008.
"New vehicle characteristics and the cost of the corporate average fuel economy standard,"
Working Paper Series
WP-08-13, Federal Reserve Bank of Chicago.
- Thomas Klier & Joshua Linn, 2012. "New‐vehicle characteristics and the cost of the Corporate Average Fuel Economy standard," RAND Journal of Economics, RAND Corporation, vol. 43(1), pages 186-213, 03.
- Bento, Antonio M. & Goulder, Lawrence H. & Jacobsen, Mark R. & von Haefen, Roger H., 2007.
"Distributional and Efficiency Impacts of Increased U.S. Gasoline Taxes,"
127021, Cornell University, Department of Applied Economics and Management.
- Antonio M. Bento & Lawrence H. Goulder & Mark R. Jacobsen & Roger H. von Haefen, 2009. "Distributional and Efficiency Impacts of Increased US Gasoline Taxes," American Economic Review, American Economic Association, vol. 99(3), pages 667-99, June.
- Christopher R. Knittel, 2009.
"Automobiles on Steroids: Product Attribute Trade-Offs and Technological Progress in the Automobile Sector,"
NBER Working Papers
15162, National Bureau of Economic Research, Inc.
- Christopher R. Knittel, 2011. "Automobiles on Steroids: Product Attribute Trade-Offs and Technological Progress in the Automobile Sector," American Economic Review, American Economic Association, vol. 101(7), pages 3368-99, December.
- Austin, David & Dinan, Terry, 2005. "Clearing the air: The costs and consequences of higher CAFE standards and increased gasoline taxes," Journal of Environmental Economics and Management, Elsevier, vol. 50(3), pages 562-582, November.
- Shanjun Li, 2012.
"Traffic safety and vehicle choice: quantifying the effects of the ‘arms race’ on American roads,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 27(1), pages 34-62, 01.
- Li, Shanjun, 2009. "Traffic Safety and Vehicle Choice: Quantifying the Effects of the "Arms Race" on American Roads," Discussion Papers dp-09-33, Resources For the Future.
- Rubin, Jonathan & Leiby, Paul N. & Greene, David L., 2009. "Tradable fuel economy credits: Competition and oligopoly," Journal of Environmental Economics and Management, Elsevier, vol. 58(3), pages 315-328, November.
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