Are Consumers Poorly Informed about Fuel Economy? Evidence from Two Experiments
American Economic Journal: Economic Policy
vol. 11,
no. 1, February 2019
(pp. 1-37)
Abstract
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.Citation
Allcott, Hunt, and Christopher Knittel. 2019. "Are Consumers Poorly Informed about Fuel Economy? Evidence from Two Experiments." American Economic Journal: Economic Policy, 11 (1): 1-37. DOI: 10.1257/pol.20170019Additional Materials
JEL Classification
- C93 Field Experiments
- D12 Consumer Economics: Empirical Analysis
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
- L62 Automobiles; Other Transportation Equipment; Related Parts and Equipment
- Q48 Energy: Government Policy
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