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

Pedro Cantos-Sánchez; Eva Gutiérrez-i-Puigarnau; Ismir Mulalic

doi:10.1016/j.retrec.2017.11.006

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 journal › Journal article › Research › peer-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 language	English
Journal	Research in Transportation Economics
Volume	70
Pages (from-to)	83-96
ISSN	0739-8859
DOIs	https://doi.org/10.1016/j.retrec.2017.11.006
Publication status	Published - 1 Jan 2018

Keywords

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

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.retrec.2017.11.006

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title = "The impact of scrappage programmes on the demand for new vehicles: Evidence from Spain",

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.",

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AU - Gutiérrez-i-Puigarnau, Eva

AU - Mulalic, Ismir

PY - 2018/1/1

Y1 - 2018/1/1

N2 - 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.

AB - 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.

KW - AIDS model

KW - Car demand

KW - Cash for clunkers

KW - Economic crisis

KW - H20

KW - Household behaviour

KW - Public subsidies

KW - R21

KW - Scrappage programme

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DO - 10.1016/j.retrec.2017.11.006

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SP - 83

EP - 96

JO - Research in Transportation Economics

JF - Research in Transportation Economics

ER -

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

Abstract

Keywords

UN SDGs

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