The corporate average fuel economy standards for automobiles andlight trucks were intended to improve energy efficiency primarily through technological improvements. While it is not clear how much ofthe impetus for manufacturers to improve fuel economy should be attributed to the corporate average fuel economy, analysis of light-duty vehicle sales and characteristics since the corporate average fueleconomy went into effect in 1978 does indicate that technological improvements are responsible for about one-half of the 40 percent increase in automobile fuel economy between 1978 and 1985. Size class shifts are responsible for only 10 percent of the total gain. The 1978-1985 market for automotive efficiency reflects interactions of demand shifts, regulation, and technological change. An attempt is madeto measure the technical improvements in automotive fuel efficiencyby estimating stochastic frontier cost functions for automotive fuel economy in 1978 and 1985. This paper appeared in transportation research record no. 1155, transportation energy. For covering abstractsee irrd no 818421.
Abstract