Evaluating “Cash-for-Clunkers”: Program Effect on Auto Sales, Jobs, and the Environment
AbstractWe investigate the effects of “Cash for Clunkers”, a $3 billion economic stimulus program, on new vehicle sales, employment, gasoline consumption, and the environment. Using Canada as the control group in a difference-in-differences framework, we find that the program increased new vehicle sales by about 0.39 million during July and August of 2009, while the net increase reduced to 0.25 million from June to December. The difference suggests that, as intended, the program significantly shifted sales to July and August from other months. Nevertheless, the program would result in only 8.58 to 28.28 million tons of CO2 emission reductions, implying a cost per ton ranging from $91 to $301 even after accounting for the benefit of the program in reducing criteria pollutants. In addition, the program is estimated to have created 3,676 job-years in the auto assembly and parts industries from June to December of 2009. That effect decreased to 2,050 by May 2010.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Resources For the Future in its series Discussion Papers with number dp-10-39.
Date of creation: 04 Aug 2010
Date of revision:
CARS program; automobiles; employment; gasoline consumption; carbon dioxide emissions;
Find related papers by JEL classification:
- L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment
- Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nada Eissa & Jeffrey B. Liebman, 1995.
"Labor Supply Response to the Earned Income Tax Credit,"
NBER Working Papers
5158, National Bureau of Economic Research, Inc.
- Eissa, Nada & Liebman, Jeffrey B, 1996. "Labor Supply Response to the Earned Income Tax Credit," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 605-37, May.
- Carroll, Christopher D & Fuhrer, Jeffrey C & Wilcox, David W, 1994.
"Does Consumer Sentiment Forecast Household Spending? If So, Why?,"
American Economic Review,
American Economic Association, vol. 84(5), pages 1397-1408, December.
- Christopher D. Carroll & Jeffery C. Fuhrer & David W. Wilcox, 1994. "RATS code for Does Consumer Sentiment Forecast Household Spending? If So, Why?," QM&RBC Codes 49, Quantitative Macroeconomics & Real Business Cycles.
- Gilbert Metcalf, 2008.
"Using Tax Expenditures to Achieve Energy Policy Goals,"
Discussion Papers Series, Department of Economics, Tufts University
0715, Department of Economics, Tufts University.
- Gilbert E. Metcalf, 2008. "Using Tax Expenditures to Achieve Energy Policy Goals," American Economic Review, American Economic Association, vol. 98(2), pages 90-94, May.
- Gilbert E. Metcalf, 2008. "Using Tax Expenditures to Achieve Energy Policy Goals," NBER Working Papers 13753, National Bureau of Economic Research, Inc.
- Sebastian Galiani & Paul Gertler & Ernesto Schargrodsky, 2002.
"Water for Life: The Impact of the Privatization of Water Services on Child Mortality,"
54, Universidad de San Andres, Departamento de Economia, revised Sep 2005.
- Sebastian Galiani & Paul Gertler & Ernesto Schargrodsky, 2005. "Water for Life: The Impact of the Privatization of Water Services on Child Mortality," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 83-120, February.
- Knittel, Christopher R, 2009. "The Implied Cost of Carbon Dioxide under the Cash for Clunkers," Institute of Transportation Studies, Working Paper Series qt95b1c3t0, Institute of Transportation Studies, UC Davis.
- Kenneth A. Small & Kurt Van Dender, 2006.
"Fuel Efficiency and Motor Vehicle Travel: The Declining Rebound Effect,"
050603, University of California-Irvine, Department of Economics.
- Kenneth A. Small & Kurt Van Dender, 2007. "Fuel Efficiency and Motor Vehicle Travel: The Declining Rebound Effect," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 25-52.
- Jason Bram & Sydney Ludvigson, 1997.
"Does consumer confidence forecast household expenditure?: A sentiment index horse race,"
9708, Federal Reserve Bank of New York.
- Jason Bram & Sydney Ludvigson, 1998. "Does consumer confidence forecast household expenditure? a sentiment index horse race," Economic Policy Review, Federal Reserve Bank of New York, issue Jun, pages 59-78.
- Abrams Burton A & Parsons George R, 2009. "Is CARS a Clunker?," The Economists' Voice, De Gruyter, vol. 6(8), pages 1-4, August.
- Adam Copeland & James Kahn, 2013.
"The Production Impact Of “Cash-For-Clunkers”: Implications For Stabilization Policy,"
Western Economic Association International, vol. 51(1), pages 288-303, 01.
- Adam Copeland & James Kahn, 2011. "The production impact of "cash-for-clunkers": implications for stabilization policy," Staff Reports 503, Federal Reserve Bank of New York.
- James M. Sallee, 2010.
"The Taxation of Fuel Economy,"
in: Tax Policy and the Economy, Volume 25, pages 1-37
National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Webmaster).
If references are entirely missing, you can add them using this form.