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CAFE OR PRICE?: An Analysis of the Effects of Federal Fuel Economy Regulations and Gasoline Price on New Car MPG, 1978-89

Following a tripling of world oil prices in 1973-74, the U.S. Congress passed the Energy Policy and Conservation Act of 1975 establishing mandatory fuel economy standards for automobiles and light trucks. Beginning at 18 MPG in 1978, the passenger car standards increased to 27.5 MPG by 1985. There has been considerable debate about the influence of the standards, as opposed to the gasoline price increases in 1973-74 and 1979-80, on new car fuel economy.

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Energy Specializations: Petroleum – Policy and Regulation; Energy Efficiency

JEL Codes: Q41: Energy: Demand and Supply; Prices, Q48: Energy: Government Policy, C51: Model Construction and Estimation

Keywords: Gasoline prices, Passenger cars, CAFÉ,

DOI: 10.5547/ISSN0195-6574-EJ-Vol11-No3-2

Published in Volume 11, Number 3 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


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