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A first look at the 'Cash for Clunkers' program

Author

Listed:
  • Michael Hicks

    (Ball State University)

  • Nalitra Thaiprasert

    (Ball State University)

Abstract

This paper estimates the short run effect of the Car Allowance Rebate System (or “Cash for Clunkers” on light vehicle sales within the United States. Using a reduced form demand model of automobiles, We find that the program led to increased sales in July and August, 2009 of between 450,000 and 710,000 vehicles. Further, We find that the pre-announcement of the program did not reduce sales in June 2009. Further, We can reject a ‘Cash for Clunkers' associated decline in automobile sales in the months immediately following the termination of the program.

Suggested Citation

  • Michael Hicks & Nalitra Thaiprasert, 2012. "A first look at the 'Cash for Clunkers' program," Economics Bulletin, AccessEcon, vol. 32(1), pages 567-573.
    • Handle: RePEc:ebl:ecbull:eb-10-00597
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2012/Volume32/EB-12-V32-I1-P53.pdf
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    References listed on IDEAS

    as
    1. Abrams Burton A & Parsons George R, 2009. "Is CARS a Clunker?," The Economists' Voice, De Gruyter, vol. 6(8), pages 1-4, August.
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    More about this item

    Keywords

    Cash for Clunkers; automobile; subsidies;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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