Consumer valuation of fuel economy over time: 2003-2012

This study is in-depth analysis of consumer valuation of fuel economy with the objective of assessing how that value has changed over time using ten years' of data covering 2003 to 2012 model year vehicle sales. Marginal willingness to pay for incremental change in fuel economy is estimated using hedonic price model for each model year. This value is then compared with the expected value of fuel savings of the increased fuel economy. The results of analysis show that valuations of fuel economy by consumers vary across vehicle classes and over time. The results of comparison indicate that marginal willingness to pay for incremental change in fuel economy (for all vehicles) generally but not perfectly tracks expected value of fuel savings and average fuel price over the years.