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Public Comments to EPA and NHTSA on the Economics of CAFE Standards

In their first notice of intent to propose new fuel economy standards for light-duty vehicles Model Year 2017 and later, EPA and NHTSA ask for comments on their research plan for the coming months and raise crucial questions, such as why the private market does not currently provide for more fuel-efficient vehicles and whether there are any “unidentified additional costs” of fuel-efficient

So today, building off our earlier work on this issue, Policy Integrity submitted comments highlighting the importance of understanding the energy efficiency paradox, the positional goods effect, and the bandwagon effect in evaluating consumer choices in the automobile market.

The agencies should investigate these phenomena—both theoretically and empirically—as part of their research agenda.