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Design Incentives to Increase Vehicle Size Created from the U.S. Footprint-based Fuel Economy Standards

This study evaluates whether the amendment which determines fuel economy targets based on vehicle footprint (wheel base by track width) to the U.S. Corporate Average Fuel Economy (CAFE) standards creates an incentive for manufactures to produce larger vehicles. By using an “oligopolistic-equilibrium model” while considering a range of customer preferences, it is determined that this amendment does create an incentive for manufacturers to produce larger vehicles; especially in light trucks. By producing these larger vehicles, there are the negative effects of lower fuel economy, higher emissions, worse vehicle performance, and higher traffic safety risks.

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Date Issued 2013-08-05
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