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The Rebound Effect for Passenger Vehicles

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  • Linn, Joshua

    (Resources for the Future)

Abstract

Increasingly stringent fuel economy standards will reduce per-mile driving costs and may raise vehicle miles traveled, which is referred to as the rebound effect. All previous estimates impose at least one of three behavioral assumptions: (a) fuel economy is uncorrelated with other vehicle attributes; (b) fuel economy is uncorrelated with attributes of other vehicles owned by the household; and (c) the effect of gasoline prices on vehicle miles traveled is inversely proportional to the effect of fuel economy. Relaxing these assumptions yields a large and robust rebound effect; a one percent fuel economy increase raises driving 0.2 to 0.4 percent.

Suggested Citation

  • Linn, Joshua, 2013. "The Rebound Effect for Passenger Vehicles," Discussion Papers dp-13-19, Resources For the Future.
  • Handle: RePEc:rff:dpaper:dp-13-19
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    File URL: http://www.rff.org/RFF/documents/RFF-DP-13-19.pdf
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    References listed on IDEAS

    as
    1. Mark R. Jacobsen, 2013. "Evaluating US Fuel Economy Standards in a Model with Producer and Household Heterogeneity," American Economic Journal: Economic Policy, American Economic Association, vol. 5(2), pages 148-187, May.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    fuel economy standards; passenger vehicles; vehicle miles traveled; household driving demand;
    All these keywords.

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • R22 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Other Demand
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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