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Do environmental rebates affect the replacement of durable products? An analysis of vehicle ownership duration in Japan

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  • Matsumoto, Shigeru
  • Iwata, Kazuyuki

Abstract

To reduce the environmental burden, many countries are providing consumers with rebates for the purchase of eco-friendly products. Although such rebate programs increase the market share of eco-friendly products and can mitigate environmental problems, they may distort the replacement cycle of durable products. The Japanese government implemented two series of eco-car rebate programs between 2009 and 2012. In this paper, we analyze the mileage of used vehicles and assess whether the rebate programs distorted the vehicle replacement cycle. Our duration analysis reveals that people sold the vehicle with low mileage in the first eco-car period but kept the vehicle with high mileage before the second eco-car period came into play.

Suggested Citation

  • Matsumoto, Shigeru & Iwata, Kazuyuki, 2019. "Do environmental rebates affect the replacement of durable products? An analysis of vehicle ownership duration in Japan," Economic Analysis and Policy, Elsevier, vol. 61(C), pages 64-72.
    • Handle: RePEc:eee:ecanpo:v:61:y:2019:i:c:p:64-72
    DOI: 10.1016/j.eap.2017.07.001
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    References listed on IDEAS

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