Federal automobile regulations

Thesis/Dissertation · Sat Jan 01 04:00:00 EST 1983

OSTI ID:6690680

Langenfeld, J A

This cost-benefit study of auto safety and emissions regulation is a major departure from the traditional methods of measuring costs and benefits. It theoreticaly derives regulation's impact on consumer demand and on production costs, and then empirically estimates these impacts with regression analysis. The study finds demand for large, expensive cars is more sensitive to price changes than small car demand, although both price elasticity estimates fall in the elastic range. In addition, auto price expectations strongly influence the demand for large new cars, but the prices of substitutes (other new cars, used cars, other durable goods) and complements (gasoline) do not significantly influence demand in most of our estimates. Regulations also exert a major influence on demand. Results show that consumers choose away from cars that are more heavily regulated. On average, individuals were willing to pay $283 per new car (in 1982 dollars) to remove-pollution control devices in addition to the new-car price increase due to pollution control. It is also interesting to note that this negative impact of pollution control does not affect the demand for all automobiles to the same extent; rather, the demand for large, American-made automobiles is reduced signficiantly more than the demand for small and imported cars. Finally, the cost associated with pollution control exceeds the benefits even when other author's estimates of external benefits are added.

• OSTI ID: 6690680
• Country of Publication: United States
• Language: English

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54 ENVIRONMENTAL SCIENCES
AUTOMOBILES
COST BENEFIT ANALYSIS
DEMAND FACTORS
MATHEMATICS
PRICES
REGRESSION ANALYSIS
SAFETY STANDARDS
SIZE
STANDARDS
STATISTICS
VEHICLES