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Automobile Fuel Economy: What is it Worth?

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  • Nair, Santosh
  • Espey, Molly

Abstract

The marginal value of increased automobile fuel economy is estimated using a hedonic model of 2001 model year automobiles sold in the United States. This value is then compared to the average expected lifetime fuel savings attributable to increased fuel economy. Results indicate that automobile buyers fully internalize fuel cost savings attributable to improved fuel economy at low discount rates, and may partially internalize other perceived benefits of improved fuel economy such as reduction in global warming or fossil fuel dependence.

Suggested Citation

  • Nair, Santosh & Espey, Molly, 2004. "Automobile Fuel Economy: What is it Worth?," 2004 Annual meeting, August 1-4, Denver, CO 20102, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20102
    DOI: 10.22004/ag.econ.20102
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    References listed on IDEAS

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