The dynamics of vehicle energy efficiency: Evidence from the Massachusetts Vehicle Census

Using a rich quarterly panel dataset containing about 3.9 million vehicles in Massachusetts over the period 2008q1 - 2011q4, this paper is attempts to improve the micro level empirical basis of the study of population-level vehicle energy efficiency, and to provide some evidence that supports policy making related to sustainable development with regard to road vehicles. It (1) presents an aggregate vehicle energy efficiency indicator (state and municipality level) by taking into account vehicle heterogeneity, (2) investigates the contribution of changes in the structure of the vehicle population that affect aggregate vehicle energy efficiency and its growth, paying particular attention to vehicles’ entry and exit, (3) explores the convergence and the Ergodic distribution of aggregate vehicle energy efficiency between municipalities, and (4) checks the socio-economic factors affecting the distribution of vehicles over locations, and vehicle exit event. The results confirm the importance of structural chance in the vehicle population, convergence of aggregate vehicle energy efficiency between municipalities and the crucial role of socio-economic factors in shaping vehicles distribution.

Keywords: vehicle level micro data, vehicle energy efficiency dynamics, decomposition, reallocation, convergence, socio-economic factors

JEL Classification: C55, O13