This report presents measures of the size of the rebound effect, by which improvements in fuel efficiency of vehicles may cause vehicle travel to increase. We use aggregate cross-sectional time series data for 1966 to 2001 on all 50 U.S. states and the District of Columbia. Our model contains a measure of the historical effects of the federal Corporate Average Fuel Economy (CAFE) standards, which helps stabilize results compared to previous literature. Also, our time series is longer than previous studies, enabling us to better discern the difference between short and long-run effects. Our best estimate of the rebound effect for the US as a whole, over the period 1966-2001, is 5.3% for the short run and 26% for the long run. We also find that the rebound effect declines with income. Using the 1997-2001 average value of income for California, the short- and long-run rebound effects are estimated at 2.2% and 11.3%, respectively. Our methodology permits projections to future years, including dynamic projections accounting for changes in income occurring at the same time as owners are adjusting from the short to the long run. These results enable researchers to predict how proposed standards for greenhouse gas emissions in California may affect the amount of vehicle ownership and travel.
For questions regarding this research project, including available data and progress status, contact: Research Division staff at (916) 445-0753
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