Note: Huber-White standard errors clustered on car producers are in parentheses; clustered standard errs for IV
estimates were estimated using formulas in Shore-Sheppard (1996). Unit of observation Shore-Sheppard (1996).
Unit of observation is at the car type-year level. Fuel economy in IV models is instrumented by engine displacement,
its interaction with dummy for diesel engines, and the rest of explanatory variables in each specification.
Engine displacement and the interaction are the instruments excluded in the second stage. First stage estimates
are reported in Table A1 in the appendix. Data source: the Vehicle Certification Agency, the United Kingdom
Department for Transport.