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Car Age, Taxation, Scrappage Premiums and the ELV Directive

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Author Info

  • Sandström, F. Mikael

    ()
    (Sveriges Riksdag)

Abstract

A chain of replacement model is used to examine the effects of automobile taxes and of a scrappage premium on the life length of cars, and on the size of the car fleet. The predictions of the model are tested on data on the scrappage of cars in Sweden 1989-2002. The theoretical model predicts that increased taxes on the purchase of cars should increase the life length of cars, and reduce the number of cars. A scrappage premium would have the opposite effects. Changes in periodic taxes would have no effects on the life length of automobiles, but would reduce the size of the car stock. The econometric analysis indicates, however, that the effects both on the life-length of cars, and on the size of the car parc are small. On the basis of the conclusions from the theoretical and the empirical analysis, the possible implications of the European Union's Directive 2000/53/EC on end-of life vehicles (ELV) are discussed.

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Bibliographic Info

Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 591.

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Length: 35 pages
Date of creation: 17 Mar 2003
Date of revision:
Handle: RePEc:hhs:iuiwop:0591

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Related research

Keywords: Taxes; Automobiles; Accelerated Vehicle Retirement Programs; Scrappage; ELV Directive;

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References

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  1. Jerome Adda & Russell Cooper, 1997. "Balladurette and Juppette: A Discrete Analysis of Scrapping Subsidies," NBER Working Papers 6048, National Bureau of Economic Research, Inc.
  2. Alberini, Anna & Harrington, Winston & McConnell, Virginia, 1996. "Estimating an Emissions Supply Function from Accelerated Vehicle Retirement Programs," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 251-65, May.
  3. Robert W. Hahn, 1995. "An Economic Analysis of Scrappage," RAND Journal of Economics, The RAND Corporation, vol. 26(2), pages 222-242, Summer.
  4. Innes, Robert, 1996. "Regulating Automobile Pollution under Certainty, Competition, and Imperfect Information," Journal of Environmental Economics and Management, Elsevier, vol. 31(2), pages 219-239, September.
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Cited by:
  1. Santos, Georgina & Behrendt, Hannah & Maconi, Laura & Shirvani, Tara & Teytelboym, Alexander, 2010. "Part I: Externalities and economic policies in road transport," Research in Transportation Economics, Elsevier, vol. 28(1), pages 2-45.

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