@article{Klemick:283626,
      recid = {283626},
      author = {Klemick, Heather and Kopits. Elizabeth and Wolverton, Ann},
      title = {Consumer Valuation of Fuel Economy: Findings from Recent  Panel Studies},
      address = {2019-01},
      number = {2168-2019-357},
      pages = {30},
      year = {2019},
      abstract = {Engineering-based studies of energy efficiency often find  that firms and consumers fail to adopt technologies that  appear to provide net private benefits absent regulation.  We examine the recent empirical literature on the extent to  which expected future fuel costs are reflected in vehicle  prices and therefore valued by consumers when making  purchase decisions. These studies improve upon the prior  literature due to their use of highly disaggregated panel  data that allows for defensible identification strategies.  These studies found that vehicle purchase prices reflect  about 50 to 100 percent of future fuel expenses, assuming  static consumer expectations about future gasoline prices  and a discount rate of five to six percent. Recent  regulatory analyses have estimated the benefits of more  stringent vehicle standards implicitly assuming that no  improvements in fuel economy will occur in the baseline,  absent regulation. This assumption is consistent with  consumers placing no value on future fuel costs when making  vehicle purchase decision. The recent empirical evidence  supports using a range of consumer valuation assumptions  and applying this range consistently in the baseline and  regulatory scenarios when modeling consumer purchase and  firm investment decisions.},
      url = {http://ageconsearch.umn.edu/record/283626},
      doi = {https://doi.org/10.22004/ag.econ.283626},
}