Impacts of long-range increases in the fuel economy (cafe) standard

Research output: Chapter in Book/Report/Conference proceedingChapter


This work models the impact of higher CAFE standards on producer and consumer welfare, gasoline consumption, externalities from increased driving, and the emissions of traditional pollutants. In particular, a long-run 3.0 MPG increase in the CAFE standard is estimated to impose welfare losses of about $4 billion per year and save about 5.2 billion gallons of gasoline per year, for a hidden tax of $0.78 per gallon conserved. An 11-cent-per-gallon increase in the gasoline tax would save the same amount offuel at a welfare cost of about $290 million per year, or about one fourteenth the cost. (JEL L51, Q30).

Original languageEnglish (US)
Title of host publicationControlling Automobile Air Pollution
PublisherTaylor and Francis
Number of pages16
ISBN (Electronic)9781351161077
ISBN (Print)9780815388227
StatePublished - Jan 1 2018

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)
  • General Business, Management and Accounting
  • General Environmental Science


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