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The relationship between gasoline prices and the demand for vehicle fuel efficiency is important for environmental policy but poorly understood in the academic literature. We provide empirical evidence that automobile manufacturers price as if consumers respond to gasoline prices. We derive a...
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We identify and examine a novel welfare channel of fuel economy standards through the in-teraction with public transit and households’ location choices. A stricter emission standard for cars decreases the marginal cost of driving and triggers a shift in modal choice from public to private...
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