Within-day variation in the rebound effect from fuel efficiency standards and implications for road congestion

Cody Nehiba

Transportation Research Part A: Policy and Practice, 2025, vol. 199, issue C

Abstract: Travel demand and congestion fluctuate throughout the day, but temporal heterogeneity in travel demand elasticities is often overlooked. I estimate within-day variation in the fuel economy elasticity of travel demand, illustrating the timing of the rebound effect — when higher fuel efficiency standards increase mileage by decreasing per-mile costs. Using multiple empirical strategies and data sets, I find that drivers are most elastic during peak demand periods that coincide with morning and evening commuting hours. Mode switching for shorter commute trips in areas with low-cost alternatives appears to drive much of the within-day heterogeneity. Further, accounting for temporal heterogeneity in the rebound effect has the potential to determine whether the congestion costs of a fuel economy improvement exceed the pollution benefits.

Keywords: Travel demand; Energy efficiency; Rebound effect; Fuel economy standards; Congestion (search for similar items in EconPapers)
JEL-codes: D62 Q41 Q58 R41 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1016/j.tra.2025.104588

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