NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Are Consumers Poorly Informed about Fuel Economy? Evidence from Two Experiments

Hunt Allcott, Christopher Knittel

NBER Working Paper No. 23076
Issued in January 2017, Revised in June 2017
NBER Program(s):Public Economics, Environment and Energy Economics

It is often asserted that consumers are poorly informed about and inattentive to fuel economy, causing them to buy low-fuel economy vehicles despite their own best interest. This paper presents evidence on this assertion through two experiments providing fuel economy information to new vehicle shoppers. Results show zero statistical or economic effect on average fuel economy of vehicles purchased. In the context of a simple optimal policy model, the estimates suggest that current and proposed U.S. fuel economy standards are significantly more stringent than needed to address the classes of imperfect information and inattention addressed by our interventions.

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Document Object Identifier (DOI): 10.3386/w23076

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