1985-06-01

On the Stability of the EPA MPG Adjustment Factors 851216

The offset (sometimes called “shortfall”) between EPA MPG and actual in-use MPG has been shown to be dependent upon vehicle technology and EPA MPG level. If these variables change significantly, there is the potential for the constant EPA MPG adjustment factors (0.90 city, 0.78 highway) to become obsolete.
Trends in passenger car MPG have been used to formulate a model of vehicle technology mixes and MPG levels over the next 15 years, to investigate the degree to which MPG adjustments derived from such a scenario might differ from the promulgated constant adjustment factors.
As a check on the reasonableness of the future technology scenario, a simple econometric model was constructed independently which relates car class market fractions and MPG levels to gasoline price, and to regulatory requirements: MPG Standards and the Gas Guzzler tax. It is shown that the technology scenario’s fleet MPG is consistent with that of the econometric model, when the latter uses a trend leading to a fuel price of about $2.25/gallon in the year 2000.
It is shown that, at fleet level, the technology scenario for technology and MPG changes does not obsolete the current MPG adjustment factors.

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