The effect of annual changes in automobile fuel economy standards

Research output: Contribution to journalArticlepeer-review

33 Scopus citations


Since 1978 the Federal government has regulated the fuel economy of new cars sold in the United States. The purpose of Corporate Average Fuel Economy (CAFE) standards is to lessen the national dependence on foreign oil. Through the use of theoretical and empirical models this paper examines the impact of CAFE standards on the automobile industry and on energy consumption. It is shown that CAFE standards may or may not save energy. If CAFE does save energy, it does so at a prohibitive cost to the economy. CAFE standards are also shown to have a number of perverse impacts on the automobile industry as well as consumers.

Original languageEnglish (US)
Pages (from-to)151-172
Number of pages22
JournalJournal of Regulatory Economics
Issue number2
StatePublished - Jun 1990

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics


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