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Wednesday, February 27, 2013

The Unintended Consequences of Fuel Efficiency

Social scientists often refer to unintended consequences, which are outcomes that are not the ones intended by a particular action (e.g., social policy, congressional legislation). The idea has been around for a long time, but it was formally named and popularized by the American sociologist Robert K. Merton. According to Wikipedia, unintended consequences can be grouped into three broad categories:
  1. A positive, unexpected benefit (usually referred to as luck, serendipity or a windfall)
  2. A negative, unexpected detriment occurring in addition to the desired effect of the policy (e.g., while irrigation schemes provide people with water for agriculture, they can increase waterborne diseases that have devastating health effects, such as schistosomiasis)
  3. A perverse effect contrary to what was originally intended (when an intended solution makes a problem worse)
A recent Freakonomics podcast considered one of the unintended consequences of fuel efficiency ("The Downside of More Miles Per Gallon"). In particular, it notes that because the Federal gas tax is the primary source of funding for road repair, the available funds has been falling and probably will continue to fall as cars get even more efficient. What's more, because the tax is a fixed amount (18.4 cents per gallon) rather than a percentage, gas-tax revenues don’t rise even when gas prices do. Thus, we are facing a future where keeping our roads in good working condition will be harder and harder under the current tax scheme.

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