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Fuel Economy Standards Are Supersizing Our Vehicles. Ford Scrapping Small Cars Is An Alarm Bell.
How can we disentangle these two possible drivers—consumers versus regulations? Before footprint-based standards were introduced in the United States, my colleague James Sallee and I decided to explore whether such size-based regulations were actually effective. After years of analysis, our results are in—and they provide important lessons for the Trump administration as it weighs how to revise fuel standards. Namely, not only are size-based standards less effective than other approaches, they are also more costly.