Automakers Are Supersizing Cars. Fuel Economy Standards May Be One Reason.

When automakers like Ford and GM announced this year that they would eliminate several car models and focus on production of pickups and SUVs, they pointed to consumer preferences as driving their decision. But a study co-authored by Koichiro Ito, an assistant professor at the University of Chicago Harris School of Public Policy, finds policy may also be playing a substantial role.

U.S. fuel economy standards are ‘attribute-based.’ This means levels are set based on a specific vehicle characteristic—in this case, its footprint, the rectangle formed by the four points where a vehicle’s tires touch the ground. The attribute-based footprint standard is used to sort vehicles into bins with different compliance targets, with larger vehicles facing more modest requirements. What impact does this have?

The study by Ito and his co-authors evaluates a similar attribute-based regulation—weight-based fuel economy standards in Japan. The policy’s bins are shown in the chart. When plotting the weight density of the cars on the market, Ito and his co-authors find that the automakers increase car weight just enough to be able to reach the next weight category with a lower fuel economy target. So, the policy did indeed incentivize automakers to increase the weight of their vehicles.