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Fuel Prices and New Vehicle Fuel Economy in Europe

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  • Klier, Thomas
  • Linn, Joshua

    (Resources for the Future)

Abstract

This paper evaluates the effect of fuel prices on new vehicle fuel economy in the eight largest European markets. The analysis spans the years 2002–2007 and uses detailed vehicle registration and specification data to control for policies, consumer preferences, and other potentially confounding factors. Fuel prices have a statistically significant effect on new vehicle fuel economy in Europe, but this estimated effect is much smaller than that for the United States. Within Europe, fuel economy responds more in the United Kingdom and France than in the other large markets. Overall, substantial changes in fuel prices would have relatively small effects on the average fuel economy of new vehicles sold in Europe. We find no evidence that diesel fuel prices have a large effect on the market share of diesel vehicles.

Suggested Citation

  • Klier, Thomas & Linn, Joshua, 2011. "Fuel Prices and New Vehicle Fuel Economy in Europe," RFF Working Paper Series dp-11-37, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-11-37
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    References listed on IDEAS

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    Cited by:

    1. Givord, Pauline & Grislain-Letrémy, Céline & Naegele, Helene, 2018. "How do fuel taxes impact new car purchases? An evaluation using French consumer-level data," Energy Economics, Elsevier, vol. 74(C), pages 76-96.
    2. Karplus, V. & Kishimoto, P. & Paltsev, S., 2012. "The global energy, CO2 emissions, and economic impact of vehicle fuel economy standards," Conference papers 332263, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. P. Givord & C. Grislain-Letrémy & H. Naegele, 2014. "How does fuel taxation impact new car purchases? An evaluation using French consumer-level dataset," Documents de Travail de l'Insee - INSEE Working Papers g2014-14, Institut National de la Statistique et des Etudes Economiques.
    4. Paltsev, Sergey & Chen, Y.-H. Henry & Karplus, Valerie & Kishimoto, Paul & Reilly, John & Loeschel, Andreas & von Graevenitz, Kathrine & Koesler, Simon, 2015. "Reducing CO2 from cars in the European Union: Emission standards or emission trading?," CAWM Discussion Papers 84, University of Münster, Münster Center for Economic Policy (MEP).
    5. Pauline Givord & Céline Grislain-Letrémy & Helene Naegele, 2014. "How Does Fuel Taxation Impact New Car Purchases?: An Evaluation Using French Consumer-Level Data," Discussion Papers of DIW Berlin 1428, DIW Berlin, German Institute for Economic Research.
    6. Ciccone, Alice, 2014. "Is it all about CO2 emissions? The environmental effects of a tax reform for new vehicles in Norway," Memorandum 19/2014, Oslo University, Department of Economics.
    7. Paltsev, Sergey & Chen, Y.-H. Henry & Karplus, Valerie & Kishimoto, Paul & Reilly, John, 2015. "CO2 Emissions, Energy, and Economic Impacts of CO2 Mandates for New Cars in Europe," Conference papers 332645, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Sergey Paltsev & Y.-H. Henry Chen & Valerie Karplus & Paul Kishimoto & John Reilly & Andreas Löschel & Kathrine Graevenitz & Simon Koesler, 2018. "Reducing CO2 from cars in the European Union," Transportation, Springer, vol. 45(2), pages 573-595, March.

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    Keywords

    fuel prices; fuel economy; new vehicles; Europe;
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