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

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

    Research output: Working paperResearch

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    Abstract

    We evaluate the impact of the Spanish car scrappage program introduced in May 2009 on short-run car purchases. The scrappage program was simultaneously discussed and implemented, and was therefore exogenous to the consumers. We analyse the effect of this program on household new car purchase decision and household expenditures. The results show that the scrappage program increased the probability to buy a new car, but decreased the mean expenditure devoted to the purchase of this new vehicle. We also evaluate the impact of the financial aid on the household welfare, which suggests that the scrappage program was neutral.
    Original languageEnglish
    PublisherMunich Personal RePEc Archive
    Number of pages29
    Publication statusPublished - Jan 2015

    Keywords

    • Car demand
    • scrappage program
    • economic crisis
    • subsidy

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