Working Paper: NBER ID: w18012
Authors: Mark R. Jacobsen
Abstract: Fuel economy standards change the composition of the vehicle fleet, potentially influencing accident safety. I introduce a model of the fleet that captures risks across interactions between vehicle types while simultaneously recovering estimates of unobserved driving safety behavior. The model importantly includes the ability to consider the selection of driver types across vehicles. I apply the model to the present structure of U.S. fuel economy standards and find an adverse effect on safety: Each MPG increment to the standard results in an additional 149 fatalities per year in expectation. I next show how two alternative regulatory provisions, including one slated to enter effect next year, can fully offset the negative safety consequences; minor changes in the regulation produce a robust, near-zero change in accident fatalities while conserving the same quantity of gasoline.
Keywords: Fuel Economy; Vehicle Safety; Driver Behavior; Econometric Model; Policy Implications
JEL Codes: L9; Q4; Q5
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increase of one mile per gallon (mpg) in fuel economy standards (R48) | Expected increase of 149 fatalities per year (J17) |
| Stricter fuel economy regulations (R48) | Adverse safety consequences (J28) |
| Certain changes in regulatory provisions (G18) | Statistically insignificant change in accident fatalities (R48) |
| Composition of the vehicle fleet and behaviors of drivers selecting different vehicle types (R48) | Overall safety impacts (J28) |