Evaluating the Causal Effects of Cash-for-Clunkers Programs in Selected Countries: Success or Failure?
AbstractThis paper provides empirical evidence that Accelerated Vehicle Programs exhibit a positive influence on car registrations using unique aggregate monthly data for 23 OECD countries from 2000 to 2010. The effect is still traceable if dynamic panel data fixed effects methods are used to address the problem of unobserved heterogeneity and controlling for macroeconomic variables like industrial production, interest rate, unemployment rate and gasoline price. Furthermore our analysis reveals that passenger car sales varied considerably before the car scrappage scheme was put in place to fight the 2009 sales crisis. Compared to a simulated counterfactual situation we find a positive overall effect (until autumn 2010) of the recent Accelerated Vehicle Programs for chosen countries: the United States, South Korea, Germany and the United Kingdom. Simulation results further show that timing and duration of the policies seem much more important for its success than the budget allocated to the program. --
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Bibliographic InfoPaper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order with number 79802.
Date of creation: 2013
Date of revision:
Find related papers by JEL classification:
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-02-02 (All new papers)
- NEP-ENE-2014-02-02 (Energy Economics)
- NEP-TRE-2014-02-02 (Transport Economics)
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