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The impact of the corporate average fuel economy standards on technological changes in automobile fuel efficiency
Abstract
Abstract This paper empirically examines the effect of the U.S. Corporate Average Fuel Economy (CAFE) standards on the technological progress in automobile fuel efficiency. Using detailed vehicle attributes data from 1978 through 2018, we find that more stringent fuel economy standards increase the rate of technological improvements in new passenger cars, and this effect is primarily driven by the response of U.S. automakers. We do not find evidence that CAFE standards have a similar effect on the technical change in light-duty trucks. Our results also indicate that higher gasoline prices have a significant and positive effect on the improvement of fuel-saving technology in both passenger cars and light trucks. Using our empirical estimates, we project that the recent rollback of Obama-era CAFE standards would forego an approximately 2-percent increase in cars’ fuel economy over the 2021-2025 period as a result of technological progress.
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“there is precedent for such policies in other sectors: the EU energy label and minimum performance standards for white appliances35, bonus-malus systems in vehicle insurance36 or fuel economy standards37, as recently approved by the Marine Environment Protection Committee for international shipping38.”
From Large carbon dioxide emissions avoidance potential in improved commercial air transport efficiency (2026) · cites this paper as [37]
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Metadata
- Authors
- Wang, Y., & Miao, Q.
- Affiliations
- Rochester Institute of Technology (US)
- Corresponding author
- Miao, Qing
- ORCID
- Miao, Qing
- Venue
- Resource and Energy Economics
- Publisher
- Elsevier BV
- Published
- 2021-02
- Volume
- 63
- Pages
- 101211
- ISSN
- 0928-7655 (ISSN-L)
- OpenAlex
- W3108469538
- Cited by
- 38
- References
- 40
- Citations by year
- 2026: 4 · 2025: 9 · 2024: 7 · 2023: 5 · 2022: 5 · 2021: 8
- FWCI
- 0.87
- Type
- journal article
- Language
- en
- Open access
- closed
- Licence
- www.elsevier.com/tdm/userlicense/1.0/ (tdm)
- www.elsevier.com/legal/tdmrep-license (tdm)
- Locations
- Resource and Energy Economics (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Funders
- Rochester Institute of Technology
- Topics
- Physical Sciences › Energy › Renewable Energy, Sustainability and the Environment › Energy, Environment, and Transportation Policies
- Physical Sciences › Engineering › Automotive Engineering › Vehicle emissions and performance
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Climate Change Policy and Economics
- Keywords
- Corporate Average Fuel Economy standards, fuel economy standards, technological change, fuel economy, passenger cars, light trucks, car manufacturers, gasoline prices, fuel-saving technology, vehicle characteristics
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