TO LDT OR NOT TO LDT

Light-duty truck (LDT) classification allows manufacturers and owners to avoid a host of passenger-car regulations, including gas-guzzler taxes, safety standards, and more stringent emissions and fuel-economy standards. The distinct policies that govern LDTs and passenger cars are described; the emissions, safety, and fuel economy differences that have resulted are evaluated; and the household use differences across such vehicles are investigated. The result is that when the average new pickup truck or sport-utility vehicle is compared with a passenger car, there appears to be an implicit subsidy of roughly $4,400 favoring the LDT. When minivans are compared with passenger cars, this subsidy is estimated to be around $2,800. With more equitable vehicle regulations, it is likely that prices would more accurately reflect the true cost differences resulting from the use of these vehicles, causing LDTs to lose some of their popularity or clean up their act.