Source: Howard H. Baker, Jr. Center for Public Policy | March 27, 2017

Dr. David Greene and Dr. Jilleah Welch have released a report titled, The Impact of Increased Fuel Economy for Light-Duty Vehicles on the Distribution of Income in the U.S.: A Retrospective and Prospective Analysis, which was sponsored by the Energy Foundation and Oak Ridge National Laboratory.

Using data from the Bureau of Labor Statistics’  Consumer Expenditures Surveys from 1980 to 2014, they find that all income groups have benefited from fuel economy improvements to passenger cars and light trucks.

Households experience a net savings as fuel savings are greater than the estimated cost  of fuel economy improvements.  As a percent of income, net savings are progressive; lower- and middle-income households benefit the most.  The impacts of future fuel economy standards to 2025 are also analyzed.

Similarly, they find that the standards will provide a net savings to all income groups and distributional effects are progressive.  Acknowledging the uncertainties in estimating the impact of fuel economy improvements on vehicle prices, the authors show that results are robust to using alternative methods for estimating costs.

Rollback Fuel Economy Standards? For Whose Benefit?