Are Consumers Poorly Informed about Fuel Economy? Evidence from Two Experiments

Hunt Allcott and Christopher Knittel

American Economic Journal: Economic Policy, 2019, vol. 11, issue 1, 1-37

Abstract: It is often asserted that consumers are poorly informed about and inattentive to fuel economy, causing them to buy low-fuel economy vehicles despite their own best interest. This paper presents evidence on this assertion through two experiments providing fuel economy information to new vehicle shoppers. Results show zero statistical or economic effect on average fuel economy of vehicles purchased. In the context of a simple optimal policy model, the estimates suggest that current and proposed US fuel economy standards are significantly more stringent than needed to address the classes of imperfect information and inattention addressed by our interventions.

JEL-codes: C93 D12 D83 D91 L62 Q48 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/pol.20170019
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Citations: View citations in EconPapers (55)

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Working Paper: Are Consumers Poorly Informed about Fuel Economy? Evidence from Two Experiments (2017)
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