Fuel economy higher, thanks to Cash for Clunkers

Sep 14, 2009

Cash for Clunkers may have run out of money, but certainly not gas.

Thanks to the federal program, the average of all new vehicles purchased in the in July and August improved about 3 percent, according to a University of Michigan study.

Michael Sivak and Brandon Schoettle of the U-M Transportation Research Institute found that the program improved fuel economy of all purchased vehicles by 0.6 in July, from an expected 21.5 mpg without the program to an actual fuel economy of 22.1 mpg. August was even better—an increase of 0.7 mpg, from an expected 21.7 mpg with no program to an actual 22.4 mpg under Cash for Clunkers.

The expected fuel economy, without the existence of the program, was calculated from a model that predicts fuel economy from the unemployment rate and the price of gasoline based on data from October 2007 through June 2009.

"Both the unemployment rate and the price of gasoline had significant effects on the average fuel economy of purchased vehicles," said Sivak, research professor and head of UMTRI's Human Factors Division. "In the months prior to the program, these two variables accounted for 58 percent of the variance in average fuel economy."

In comparison to the average fuel economy of 22.4 mpg in August 2009, the lowest value during the period examined was 20.2 mpg in October 2007. On the other hand, the highest fuel economy previously achieved was 21.7 mpg in May 2008, when hovered around $3.77 per gallon.

More information: Read the study (.pdf)

Provided by University of Michigan (news : web)

Explore further: Launching a new brand: Is partnering with a popular brand a good idea?

add to favorites email to friend print save as pdf

Related Stories

Higher gas prices help reduce emissions

Aug 03, 2009

(PhysOrg.com) -- Less driving and greater vehicle fuel economy aren't the only byproducts of higher gas prices—lower carbon dioxide emissions is another benefit, say University of Michigan researchers.

Recommended for you

Professor analyzes role of trade sanctions against Iran

Mar 04, 2015

Israeli Prime Minister Benjamin Netanyahu addressed Congress on Tuesday as about 50 Democratic lawmakers threatened to boycott the address, offering the latest and one of the most clear microcosms of the debate about Iran's ...

Think twice about investing in own company

Mar 04, 2015

Employees whose retirement plan is invested in stock of the company where they work do not pull out money as the firms approach financial distress, a recently released, but yet to be published paper, co-authored ...

When performance comparisons spur risky behavior

Mar 02, 2015

When you're at work, there are two types of people you compete with: People with similar responsibilities at your own company, and rivals with similar duties at other companies. How do those different flavors ...

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

mongander
Sep 15, 2009
This comment has been removed by a moderator.
Sean_W
not rated yet Sep 15, 2009
So the secret to getting people to choose fuel efficient cars is to convince them to buy when they are worried about their jobs and gas prices. So keeping unemployment up and oil prices as high as posible is a smart strategy. Now if we can just solve the obesity problem by nationalizing farm land we'll be set.

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.