How Much Do Consumers Value Fuel Cost Savings? Evidence from Passenger Vehicle Leasing
Kevin Ankney and
Benjamin Leard
Additional contact information
Benjamin Leard: Resources for the Future
No 21-27, RFF Working Paper Series from Resources for the Future
Abstract:
Vehicle leasing involves a consumer renting a car for about three years. Given the typical lease length, we show that estimating valuation of leased vehicle fuel cost savings is fundamentally different from estimating valuation of purchased vehicle fuel cost savings. We find that new vehicle lessees and buyers undervalue lifetime fuel cost savings. But because leasing periods last around three years, new vehicle lessees fully value lease-specific fuel cost savings. Our estimates also imply that leasing companies set residual values, defined as a vehicle’s post-lease expected value, with the expectation that used vehicle buyers undervalue post-lease fuel cost savings.
Date: 2021-08-25
New Economics Papers: this item is included in nep-ene, nep-tre and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
https://www.rff.org/documents/3902/WP_21-27_April_2023_Update.pdf (application/pdf)
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:rff:dpaper:dp-21-27
Access Statistics for this paper
More papers in RFF Working Paper Series from Resources for the Future Contact information at EDIRC.
Bibliographic data for series maintained by Resources for the Future ().