GRA
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Via GCC: http://www.greencarcongress.com/2017/09/20170927-soda.html
An analysis by a team from the University of California, Davis, MIT and Yale suggests that households that buy a fuel-efficient vehicle tend to compensate for that purchase by buying a bigger, more powerful second vehicle. . . .
The researchers explored the phenomenon of attribute substitution in the context of multi-vehicle households. Attribute substitution is the trading off of the particular attributes of one product with the attributes of another—ordering a side of fries with a diet soda, for example, or decreasing the size of other televisions in a home after buying a larger screen version. . . .
Broadly, they found evidence that households substitute attributes across the vehicle portfolio. Increases in the fuel economy of the kept car reduced the probability the household purchases a car in the lower quartile of gallons per mile (the highest fuel economy quartile); rather such increases raised the probability the household buys a car in the upper quartile (the lowest fuel economy quartile).
- Attribute substitution erodes over 60% of the fuel savings from the fuel economy increase of the kept vehicle on net after accounting for all of these factors. As a specific example, consider a 10 percent increase in fuel economy from the average vehicle in our sample. Given the average miles driven (688 per vehicle in our sample), this 10 percent fuel economy increase would directly lead to a 69 gallon decrease in annual fuel consumption. However, due to attribute substitution the next vehicle the household purchases will be less fuel efficient than it otherwise would have been. This decrease in fuel economy of the newly-purchased vehicle reduces the fuel savings from our thought experiment to 40 gallons, holding usage of the two vehicles constant. But we also find significant changes in usage patterns that further reduce the net fuel savings.
Mileage of the kept car increases significantly. A large fraction of this increase is due to shifts in miles traveled from the now less fuel efficient purchased vehicle; however, we also find a net increase in overall mileage across the two-vehicle portfolio. Accounting for all of the changes, the net savings of the exogenous increase in fuel economy falls from the naive estimate of 68 gallons to 24 or 27 gallons, depending on whether the initial vehicle was the most fuel efficient vehicle in the household.
—Archsmith et al.