Are consumers poorly informed about fuel economy? Evidence from two experiments

Hunt Allcott, Christopher Knittel

    Research output: Contribution to journalArticle

    Abstract

    It is often asserted that consumers are poorly informed about and inattentive to fuel economy, causing them to buy low-fuel economy vehicles despite their own best interest. This paper presents evidence on this assertion through two experiments providing fuel economy information to new vehicle shoppers. Results show zero statistical or economic effect on average fuel economy of vehicles purchased. In the context of a simple optimal policy model, the estimates suggest that current and proposed US fuel economy standards are significantly more stringent than needed to address the classes of imperfect information and inattention addressed by our interventions.

    Original languageEnglish (US)
    Pages (from-to)1-37
    Number of pages37
    JournalAmerican Economic Journal: Economic Policy
    Volume11
    Issue number1
    DOIs
    StatePublished - Feb 1 2019

    ASJC Scopus subject areas

    • Economics, Econometrics and Finance(all)

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