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Diane Publishing Books
Effect of Vehicle Fuel Economy Standards on Technology Adoption
Thomas Klier (au); Joshua Linn (au)
Many countries are tightening passenger vehicle fuel economy standards. This study provides the first empirical evidence on the effects of recently tightened fuel economy standards on technology adoption. Specifically, it investigates changes in the rate and direction of technology adoption, that is, the extent to which technology is used to increase fuel economy at the expense of other vehicle attributes. The authors find that recent U.S. and European standards have both increased the rate of technology adoption and affected the direction of technology adoption. Producers reduced horsepower and torque compared to a counterfactual in which fuel economy standards remained unchanged. The authors estimate opportunity costs from reduced horsepower and torque to be of similar magnitude as the gains from fuel savings. Figures and tables. This is a print on demand report.
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