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Arik Levinson, Georgetown University

Who Values Future Energy Savings? Evidence from American Drivers.

Regulators attest that energy efficiency standards save consumers money. More efficient light bulbs, appliances, and vehicles would cost more upfront 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 have saved money purchasing 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.

May 17, 2022 02:00 PM in Brussels