How Do Gasoline Prices Affect Fleet Fuel Economy?

by Shanjun Li, Roger von Haefen and Christopher Timmins

- Exploiting a rich data set of passenger vehicle registrations in twenty U.S. metropolitan statistical areas from 1997 to 2005, the authors examine the effects of gasoline prices on the automotive fleet's composition. They find that high gasoline prices affect fleet fuel economy through two channels: (1) shifting new auto purchases towards more fuel-efficient vehicles, and (2) speeding the scrappage of older, less fuel-efficient used vehicles.

Li, S., R. von Haefen and C. Timmins (2008). "How Do Gasoline Prices Affect Fleet Fuel Economy?" NBER Working Paper No. 14450, Oct 2008.