Department of Economics
University of California, Irvine
Institutional Affiliation: University of California at Irvine
Information about this author at RePEc
NBER Working Papers and Publications
|April 2017||The Effect of Fuel Economy Standards on Vehicle Weight Dispersion and Accident Fatalities|
with Antonio Bento, Kenneth Gillingham: w23340
The firm response to regulation is seldom as controversial as in the context of fuel economy standards, a dominant policy to reduce emissions from vehicles worldwide. It has long been argued that such standards lead to vehicle weight changes that increase accident fatalities. Using unconditional quantile regression, we are the first to document the effect of the Corporate Average Fuel Economy (CAFE) standards on the vehicle weight distribution. We find that on net CAFE reduced fatalities, with lowered mean weight dominating increased dispersion. When monetized, this effect suggests positive net benefits from CAFE even with no undervaluation of fuel economy.