Nber Working Paper Series Fuel Consumption and Gasoline Prices: the Role of Assortative Matching between Households and Automobiles
نویسندگان
چکیده
Analyses of policies to reduce gasoline consumption have focused on two effects, a compositional effect on the fuel economy of the automotive fleet and a utilization effect on how much people drive. However, the literature has missed a third effect: a matching effect, in which the policy changes how high-utilization households are matched to fuel-efficient vehicles in equilibrium. We show that higher gas prices should lead to stronger assortative matching. Empirical estimates using US micro-level data are consistent with this hypothesis. We find a $1 gas tax would reduce US gas consumption by 1.5% through the matching effect alone. H. Spencer Banzhaf Department of Economics Andrew Young School of Policy Studies Georgia State University P.O. Box 3992 Atlanta, GA 30302 and NBER [email protected] Taha Kasim Dept. of Economics, Furman Univ. 3300 Poinsett Hwy. Greenville, SC 29613 [email protected]
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