Work

Qualitative Effects of Cash-For-Clunkers Programs

Year: 2009

Type: article

Abstract: This paper documents how automobile scrappage incentives such as those of the “2009 Car Allowance Rebate System ” (CARS) may influence drivers ’ tastes in favor of more fuel-efficient automobiles. Between 1994 and 2000 the market share of fuel efficient diesel automobiles doubled after two scrappage programs sponsored by the Spanish Government. We show that demand for diesel automobiles was not only driven by better mileage; that gasoline and diesel models became closer substitutes over time; and that automobile manufacturers increased their markups on diesel automobiles as their demand increased. Taking the experience of the Spanish market as a reference, we conclude that CARS will have little qualitative effect on the demand for automobiles in the U.S. beyond the temporary increase in sales. Keywords:

Authors: Eugenio J. Miravete, María José Moral Rincón

Institutions: Centre for Economic Policy Research, The University of Texas at Austin, Universidad Nacional de Educación a Distancia

Language: English

Topic: Energy, Environment, and Transportation Policies

Subfield: Renewable Energy, Sustainability and the Environment

Field: Energy

Domain: Physical Sciences

Open Access status: green

OpenAlex ID: W1511377217

FWCI: 1.733

Cites: 21

Cited by: 18

Related to: 10