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A hedonic test of the effects of the Alternative Motor Fuels Act

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  • Liu, Yimin
  • Helfand, Gloria E.

Abstract

Under the Alternative Motor Fuels Act (AMFA), vehicles that run on ethanol, methanol, or natural gas get extra credits in the calculation of Corporate Average Fuel Economy (CAFE). This paper uses hedonic techniques to examine the effect of production of alternative-fuel vehicles (AFVs) on the implicit price of fuel economy. This study finds that, after AFVs came to market, the marginal value of fuel economy from companies producing them decreased. This finding suggests that manufacturers who produced AFVs were willing to offer a lower price for fuel economy, because automakers had an additional way to achieve fuel economy standards beyond improving the fuel efficiency of conventional cars. These findings bolster the argument that a major role of the AMFA credit for AFVs is to allow automakers to increase their production of fuel-inefficient vehicles.

Suggested Citation

  • Liu, Yimin & Helfand, Gloria E., 2012. "A hedonic test of the effects of the Alternative Motor Fuels Act," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(10), pages 1707-1715.
    • Handle: RePEc:eee:transa:v:46:y:2012:i:10:p:1707-1715
    DOI: 10.1016/j.tra.2012.08.008
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    References listed on IDEAS

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    Cited by:

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    2. Galarraga, Ibon & Ramos, Ana & Lucas, Josu & Labandeira, Xavier, 2014. "The price of energy efficiency in the Spanish car market," Transport Policy, Elsevier, vol. 36(C), pages 272-282.
    3. Giuliano Rolle, 2022. "Between and within vehicle models hedonic analyses of environmental attributes: the case of the Italian used-car market," SEEDS Working Papers 0822, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Aug 2022.
    4. Arawomo, Damilola F. & Osigwe, Augustine C., 2016. "Nexus of fuel consumption, car features and car prices: Evidence from major institutions in Ibadan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 1220-1228.

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