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Estimating Consumer Substitution Between New and Used Passenger Vehicles

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  • Leard, Benjamin

    (Resources for the Future)

Abstract

This paper presents a simple method for estimating consumer substitution between new and used passenger vehicles.The method is applied to simulate the effect of tightening fuel economy standards for cars and light trucks on new vehicle sales.The simulation results show that applying the estimated elasticity to evaluating the SAFE vehicles rules significantly reduces the net benefits of the rule.

Suggested Citation

  • Leard, Benjamin, 2019. "Estimating Consumer Substitution Between New and Used Passenger Vehicles," RFF Working Paper Series 19-01, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-19-01
    as

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    File URL: https://www.rff.org/documents/3167/WP_19-01_rev_nov2021.pdf
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    References listed on IDEAS

    as
    1. Benjamin Leard & Joshua Linn & Virginia McConnell, 2017. "Fuel Prices, New Vehicle Fuel Economy, and Implications for Attribute-Based Standards," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(3), pages 659-700.
    2. McCarthy, Patrick S, 1996. "Market Price and Income Elasticities of New Vehicles Demand," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 543-547, August.
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    6. Steven Berry & James Levinsohn & Ariel Pakes, 2004. "Differentiated Products Demand Systems from a Combination of Micro and Macro Data: The New Car Market," Journal of Political Economy, University of Chicago Press, vol. 112(1), pages 68-105, February.
    7. Gruenspecht, Howard K, 1982. "Differentiated Regulation: The Case of Auto Emissions Standards," American Economic Review, American Economic Association, vol. 72(2), pages 328-331, May.
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    Full references (including those not matched with items on IDEAS)

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