Fueling Electrification: The Impact of Gas Prices on Hybrid Car Usage

Laura Grigolon, Eunseong Park and Kevin Remmy

Journal of the Association of Environmental and Resource Economists, 2026, vol. 13, issue 3, 681 - 711

Abstract: We use microlevel data on fuel consumption, mileage, and travel mode to study how plug-in hybrid drivers respond to fuel prices. When fuel prices rise, plug-in hybrids reduce fuel consumption more than gasoline and diesel cars. They do not proportionally reduce their mileage; instead, they increase electric charging. Since plug-in hybrids drive in electric mode for only half the distance suggested by official test cycle values, fuel prices are effective in improving the environmental performance of these vehicles.

Date: 2026
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