Peter Van Doren argues that consumers correctly consider fuel costs when making vehicle-buying decisions. However, CAFE standards cannot be justified as correcting some sort of consumer failure to appreciate fuel savings. The idea that CAFE reduces carbon emissions is slightly more reasonable, but it is a very indirect, inefficient and regressive method. For these reasons, it is difficult to not side with Trumps’ negative view of CAFE.

What is CAFE? How does regulation affect markets? How did Richard Nixon use price controls? Is Trump the great deregulator?

Further Reading:

Regulation without Results, written by Peter Van Doren

CAFE Standards, written by Peter Van Doren

Related Content:

Regulations Gone Wrong, Free Thoughts Podcast

The Implications of Behavioral Economics, Free Thoughts Podcast

What Role Should Science Play in Public Policy?, Free Thoughts Podcast

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