The impact of scrappage programmes on the demand for new vehicles: Evidence from Spain

Pedro Cantos-Sánchez*, Eva Gutiérrez-i-Puigarnau, Ismir Mulalic

*Corresponding author for this work

    Research output: Contribution to journalJournal articleResearchpeer-review

    Abstract

    We evaluate the impact of the Spanish car scrappage programme introduced in May 2009 on short-run car purchases. The scrappage programme was simultaneously discussed and implemented and was therefore exogenous to the consumers. We analyse the effect of this programme on household new car purchase decision and household expenditures. The results show that the scrappage programme increased the probability of buying a new car but decreased the mean expenditure devoted to the purchase of this new vehicle. We also evaluate the effect of financial aid on household welfare. Our best estimate of the welfare gain related to the scrappage programme is very similar to the aid of €1000 offered by the public administrations.

    Original languageEnglish
    JournalResearch in Transportation Economics
    Volume70
    Pages (from-to)83-96
    ISSN0739-8859
    DOIs
    Publication statusPublished - 1 Jan 2018

    Keywords

    • AIDS model
    • Car demand
    • Cash for clunkers
    • Economic crisis
    • H20
    • Household behaviour
    • Public subsidies
    • R21
    • Scrappage programme

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