Julien Isnard

Job market paper

Pricing Distortions from Attribute-Based Emissions Standards: A Study of CAFÉ

This paper follows from the extensive literature on the impact of environmental standards on firms as well as their distributional consequences on the consumer side. After recovering parameter estimates for consumer valuation of vehicle attributes, I explore the impact of shifting from a uniform fleet-specific emission standard to a regressive standard that incorporates a reduction in efficiency requirements for larger vehicles. This shift results in a new dimension for regulatory compliance that shifts incentives for the firm and creates a distortion in the price schedules of multi-product firm offerings. Using the shift in Corporate Average Fuel Efficiency Standards, I estimate the taxation and subsidization effects faced by consumers.