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Vehicle Lifetime Trends and Scrappage Behavior in the U.S. Used Car Market

Author

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  • Antonio Bento
  • Kevin Roth
  • Yiou Zuo

Abstract

Using national data on vehicles in operation, we examine long-run changes in scrappage patterns in passenger cars and light trucks in the United States between 1969 and 2014. We find that the average lifetime for passenger cars has increased from 12.2 to 15.6 years between 1970s and the 2000s. Our central estimate of the elasticity of scrappage with respect to vehicle prices is -0.4, which is substantially different than values adopted in simulation models. These estimates imply that many policies aimed at reducing gasoline consumption, including Corporate Average Fuel Economy standards and gasoline taxes may produce changes in the used vehicle market that are different than prior studies suggest. We also note that consumer scrappage behavior seems to respond more strongly to changes in vehicle price than changes in gasoline price than standard theory would predict.

Suggested Citation

  • Antonio Bento & Kevin Roth & Yiou Zuo, 2018. "Vehicle Lifetime Trends and Scrappage Behavior in the U.S. Used Car Market," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    • Handle: RePEc:aen:journl:ej39-1-bento
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    Cited by:

    1. Lucas W. Davis, 2023. "The Economic Determinants of Heat Pump Adoption," NBER Chapters, in: Environmental and Energy Policy and the Economy, volume 5, pages 162-199, National Bureau of Economic Research, Inc.
    2. Antonio M. Bento & Mark R. Jacobsen & Christopher R. Knittel & Arthur A. van Benthem, 2020. "Estimating the Costs and Benefits of Fuel-Economy Standards," Environmental and Energy Policy and the Economy, University of Chicago Press, vol. 1(1), pages 129-157.
    3. Dumortier, Jerome & Elobeid, Amani & Carriquiry, Miguel, 2022. "Light-duty vehicle fleet electrification in the United States and its effects on global agricultural markets," Ecological Economics, Elsevier, vol. 200(C).
    4. Balaguer, Jacint & Pernías, José C. & Ripollés, Jordi, 2023. "Is vehicle scrapping affected by low-emission zones? The case of Madrid," Transportation Research Part A: Policy and Practice, Elsevier, vol. 172(C).
    5. Leard, Benjamin & Linn, Joshua & Springel, Katalin, 2023. "Vehicle Attribute Tradeoffs and the Distributional Effects of US Fuel Economy and Greenhouse Gas Emissions Standards," RFF Working Paper Series 23-04, Resources for the Future.
    6. John McCollough & Ailian Qiu, 2021. "Rising repair costs and the throwaway society," Economic Affairs, Wiley Blackwell, vol. 41(2), pages 284-298, June.
    7. Becker, Henrik & Becker, Felix & Abe, Ryosuke & Bekhor, Shlomo & Belgiawan, Prawira F. & Compostella, Junia & Frazzoli, Emilio & Fulton, Lewis M. & Guggisberg Bicudo, Davi & Murthy Gurumurthy, Krishna, 2020. "Impact of vehicle automation and electric propulsion on production costs for mobility services worldwide," Transportation Research Part A: Policy and Practice, Elsevier, vol. 138(C), pages 105-126.
    8. Kenneth A. Small, 2017. "The Elusive Effects of CAFE Standards," Working Papers 171803, University of California-Irvine, Department of Economics.
    9. Jerome Dumortier & Miguel Carriquiry & Amani Elobeid, 2023. "Interactions Between U.S. Vehicle Electrification, Climate Change, and Global Agricultural Markets," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(1), pages 99-123, January.
    10. Herbert Dawid & Gerd Muehlheusser, 2019. "Smart products: liability, timing of market introduction, and investments in product safety," CESifo Working Paper Series 7673, CESifo.
    11. Leard, Benjamin & Linn, Joshua & Springel, Katalin, 2020. "Have US Fuel Economy and Greenhouse Gas Emissions Standards Improved Social Welfare?," RFF Working Paper Series 20-06, Resources for the Future.
    12. Pyddoke, Roger & Swärdh, Jan-Erik & Algers, Staffan & Habibi, Shiva & Sedehi Zadeh, Noor, 2019. "Long-term responses to car-tax policies: distributional effects and reduced carbon emissions," Papers 2019:4, Research Programme in Transport Economics.

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    JEL classification:

    • F0 - International Economics - - General

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