'Clunkers' Improved Overall Fuel Economy in U.S. Less Than 1 MPG, Study Finds

'Clunkers' Improved Overall Fuel Economy in U.S. Less Than 1 MPG, Study Finds

Researchers at the University of Michigan say the American cash-for-clunkers program improved the average fuel economy of all vehicles purchased in the U.S. by 0.6 miles per gallon in July and 0.7 mpg in August of this year.

As you'll recall, from July 27 through August 24, the government-sponsored a vehicle-scrappage program officially called the Car Allowance Rebate System and informally referred to as the cash-for-clunkers program gave buyers a rebate when they traded in a vehicle while purchasing a new one.

Generally, the trade-in vehicles must have had fuel economy of 18 mpg or less and be less than 25 years old.  The rebate was either $3,500 or $4,500, depending on the difference between the fuel economy of the new and the trade-in vehicles.

Overall, about 690,000 vehicles were purchased (and traded in) under the program, according to the U.S. Department of Transportation. This compares to a total of about 2,260,000 vehicles sold in July and August 2009.

To estimate the benefits of the program on the overall fuel economy of the light-duty vehicles purchased, Michael Sivak and Brandon Schoettle of the University of Michigan's Transportation Research Institute calculated the expected fuel economy of purchased new vehicles without the program.

To do this, they used the relationships between economic indicators and the fuel economy of purchased vehicles that they obtained during research they did earlier research. In that study, the fuel economy of purchased new vehicles in a given month was reasonably well predicted by knowing the corresponding unemployment rate and the price of gasoline.

In the just-concluded study, they used the same approach to predict the fuel economy for July and August of 2009 without the program, and compared this baseline prediction with actual fuel economy observed for the same months. A step-by-step account of their work, complete with tables and charts, can be viewed at a University of Michigan Website.

Neither of the study's authors discussed whether the slight improvement in average fuel economy that resulted from the clunkers program justified its cost to American taxpayers.

However, another study concluded the program was a very expensive way to reduce carbon-dioxide emissions. Sivak and Schoettle's work seems to support the earlier study.

Scott Doggett:  is an AutoObserver.com Associate Editor.