Consumer’s Surplus with a Racial Apology? Black Relative to Non-Black Inequality in the Welfare Gains of Fuel-Efficient Cars and Trucks

Juliet Elu () and Gregory Price

The Review of Black Political Economy, 2015, vol. 42, issue 1, 135-154

Abstract: This paper considers whether race conditions the welfare gains associated with the purchase of cars and trucks that comply with National Highway Traffic Safety Administration Corporate Average Fuel Efficiency Standards . We utilize data from the General Social Survey on respondent stated preferences for the extent to which they value fuel-efficient cars and trucks to estimate the maximum market price they are willing to pay for fuel-efficient cars and trucks. Multinomial and Binary Logit parameter estimates from an inverse demand maximum price valuation specification reveal that relative to non-black Americans, black Americans place less value on fuel-efficient cars and trucks. Our results suggest that federal Corporate Average Fuel Efficiency Standards policy is a source of inegalitarian and racially stratified welfare outcomes as relative to non-black Americans, black Americans gain less consumer’s surplus from fuel-efficient cars and trucks. Copyright Springer Science+Business Media New York 2015

Keywords: Race; Stratification; Energy Policy; Inequality (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1007/s12114-014-9197-7

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