With the rise of fuel-sipping hybrids and electric vehicles (EVs) gracing American roads, one might assume we’re cruising towards a greener future. However, new research from the University of Maryland throws a wrench into this optimistic vision, revealing a counterintuitive trend in car purchasing habits.
A recently published study in The RAND Journal of Economics unveils that the environmental benefits of choosing a fuel-efficient car are often partially negated by a less eco-conscious second vehicle purchase within the same household. In fact, a significant 57% of the potential fuel savings – and the associated reduction in atmospheric carbon emissions – gained from driving a fuel-efficient car can be undermined when households opt for a second, less efficient “gas guzzler.”
This phenomenon carries substantial implications, especially considering that approximately 75% of car purchases are made by multi-car households. The findings challenge the effectiveness of regulations like the Corporate Average Fuel Economy (CAFE) standards and carbon mitigation initiatives such as the “cash for clunkers” program. These policies, designed to promote fuel efficiency and remove older, polluting vehicles from circulation, may be overlooking the complexities of real-world consumer decision-making, according to James Archsmith, the study’s lead author and an assistant professor in the Department of Agricultural and Resource Economics.
“Current energy policies heavily incentivize the purchase of more fuel-efficient cars,” Archsmith explains. “However, these policies often operate under the assumption that each car purchase is an isolated event, independent of other household factors. This assumption simply doesn’t hold true. The presence of other vehicles, household priorities, and the interplay between purchase decisions and intended vehicle use are crucial elements for understanding the actual effectiveness of our policies.”
Archsmith, along with researchers from Yale University, MIT, and UC Davis, meticulously analyzed California Department of Motor Vehicles data spanning six years of purchases made by two-car households. Their analysis revealed consistent patterns indicating a decrease in overall household fuel economy and efficiency. Archsmith draws a parallel to the “diet soda effect,” where individuals may reduce calorie intake in one area but inadvertently compensate by indulging in less healthy choices elsewhere, ultimately negating the initial benefit.
“It’s unlikely that consumers are consciously thinking, ‘Now that I have a fuel-efficient car, I can splurge on a gas guzzler,’” Archsmith clarifies. Instead, the dynamic is likely more nuanced. “It might be more along the lines of: ‘I own a small, fuel-efficient car, but it’s not ideal for family trips or comfortable for long drives. Therefore, I’ll buy a larger, second car.’ This decision is likely driven by utility and practical needs, but it is intrinsically linked to fuel economy considerations nonetheless.”
The research further uncovered that consumers who invest in fuel-efficient vehicles tend to drive them more frequently and for longer distances than they might have otherwise. This increased usage further diminishes the anticipated emissions reductions. This is a crucial point when considering the overall impact of fuel-efficient vehicle adoption.
“Unintended consequences like this must be factored into policy development,” emphasizes David Rapson, a study co-author and economist at UC Davis. “Fuel economy standards are successfully increasing the number of fuel-efficient cars in households, which is positive for reducing gasoline consumption. However, if this, in turn, motivates people to purchase a larger, less fuel-efficient second vehicle as compensation, this unintended consequence will erode the very goals the policy aims to achieve.”
Looking ahead, Archsmith and his team are expanding their research beyond California, a state often seen as a bellwether for national car emission control measures. They also plan to investigate other driving behaviors that impact fuel economy policies.
“Moving forward, we want to delve deeper into driving behavior patterns within multi-car households and how these households respond to fluctuations in gasoline prices,” Archsmith states. “The recent pandemic has also significantly altered driving habits, and we anticipate observing a potential surge in purchases of fuel-inefficient vehicles as lockdowns ease and gas prices remain relatively low.” This evolving landscape underscores the need for continuous research and adaptive policy-making in the pursuit of effective and sustainable transportation solutions.
