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 US fuel economy standards are significantly more stringent than needed to address the classes of imperfect information and inattention addressed by our interventions.
Allcott, Hunt, and Christopher Knittel.
"Are Consumers Poorly Informed about Fuel Economy? Evidence from Two Experiments."
American Economic Journal: Economic Policy,
Consumer Economics: Empirical Analysis
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
Automobiles; Other Transportation Equipment; Related Parts and Equipment
Energy: Government Policy