Title

Going, Guzzling, Gone? The Effects of Gasoline Prices on Consumer Vehicle Procurement

Student Author(s)

Kyle Anderson

Faculty Mentor(s)

Dr. Sarah Estelle

Document Type

Poster

Event Date

4-15-2016

Abstract

First enacted by the United States Congress in 1975, Corporate Average Fuel Economy (CAFE) standards were imposed by policymakers on manufacturers to regulate automobile fuel efficiency, with the goal of steadily improving average fuel economy. However, if consumers’ vehicle procurement decisions counteract fuel efficiency regulation during periods of low gasoline prices despite CAFE standards, alternative regulation targeting gasoline prices directly may be more effective. I will use monthly, state-level panel data from IHS Automotive during 2010 - 2015 to estimate the effect of gasoline prices on new vehicle registrations in models incorporating state and month fixed effects. Since the data are categorized by vehicle class and method of acquisition (purchased versus leased) with retrospective gasoline prices, I can consider both the magnitude and length of gasoline price changes necessary to impact new registrations of various vehicle classifications, with an emphasis on SUVs (Sport Utility Vehicles). By evaluating different classes of vehicles purchased, as well as the acquisition methods during periods of changing gasoline prices with varying length and intensity, this study will analyze the potential myopia in the consumer vehicle acquisition process.

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