Assessing the drivers of changes in aggregate fuel economy in Massachusetts: The role of vehicle reallocation

Sheng Zhong

Technological Forecasting and Social Change, 2021, vol. 166, issue C

Abstract: The U.S. state of Massachusetts has experienced a significant decrease in transport emissions along with an increasing vehicle population in recent years. Given the dominant share of fossil fuel vehicles, this divergence with emissions may be due to the changes in fuel economy. This paper seeks to quantify the aggregate fuel economy, its driving factors, and the corresponding changes in Massachusetts using comprehensive microdata from the Massachusetts Vehicle Census over the period 2008q1 – 2014q4. First, this paper develops an indicator of aggregate fuel economy that incorporates both individual fuel economy and vehicle usage. Next, it decomposes the time series of aggregate fuel economy into an unweighted average fuel economy and a covariance term and subsequently decomposes the growth in aggregate fuel economy into within, between, entry, and exit effects. The results show an improvement in aggregate fuel economy over the research period with an average quarterly growth of 0.63 percent. Furthermore, the results highlight the important role of reallocation of vehicles (entry and exit of vehicles) as it contributed the most (approximately 8.41 percent) to the growth of aggregate fuel economy.

Keywords: Microdata; Aggregate fuel economy; Decomposition; Reallocation (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:tefoso:v:166:y:2021:i:c:s0040162521001013

DOI: 10.1016/j.techfore.2021.120669

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