The effectiveness of mandatory fuel efficiency standards in reducing gasoline consumption

The Energy Policy and Conservation Act was enacted in order to reduce the consumption of gasoline by automobiles by imposing mandatory fuel efficiency standards. This paper presents a model of gasoline consumption which includes the Corporate Average Fuel Economy (CAFE) standards as an integral part. The empirical results indicate that the CAFE standards are not statistically significant determinants of automobile fleet fuel efficiency. In addition, the results indicate that the price of gasoline and the per capita number of automobiles are statistically significant factors of the level of gasoline consumption.