Who Values Future Energy Savings? Evidence from American Drivers

Arik Levinson and Lutz Sager

Journal of the Association of Environmental and Resource Economists, 2023, vol. 10, issue 3, 717 - 751

Abstract: Regulators attest that energy efficiency standards save consumers money. More efficient light bulbs, appliances, and vehicles would cost more up front but reduce energy expenses by enough to compensate. Using data on American drivers and cars, we show this to be true, but only on average. Many drivers could save money in less fuel-efficient cars. In fact, we find little correlation between mileage and fuel economy. A driver’s income, sex, age, and education are far more closely associated with their vehicle’s fuel economy. Rich drivers are not more sensitive to fuel costs, undermining claims that borrowing constraints explain the mismatch.

Date: 2023
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Related works:
Working Paper: Who Values Future Energy Savings? Evidence from American Drivers (2021)
Working Paper: Who Values Future Energy Savings? Evidence from American Drivers (2020)
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