Corporate Average Fuel Economy Standards and the Market for New Vehicles

Thomas Klier and Joshua Linn

Annual Review of Resource Economics, 2011, vol. 3, issue 1, 445-462

Abstract: This article presents an overview of the economics literature on the effect of corporate average fuel economy (CAFE) standards on the new vehicle market. Since 1978, CAFE has imposed fuel economy standards for cars and light trucks sold in the U.S. market. This article reviews the history of the standards, followed by a discussion of the major upcoming changes in implementation and stringency. It describes strategies that firms can use to meet the standards and reviews the CAFE literature as it applies to the new vehicle market. The review concludes by highlighting areas for future research in light of the upcoming changes to CAFE.

Keywords: CAFE; costs; structural estimation (search for similar items in EconPapers)
JEL-codes: L5 Q5 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (7)

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Related works:
Working Paper: Corporate average fuel economy standards and the market for new vehicles (2011)
Working Paper: Corporate Average Fuel Economy Standards and the Market for New Vehicles (2010)
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