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Effectiveness of Car Scrappage Schemes: Comparative Analysis of European Countries

Author

Listed:
  • Miroslav Svoboda

    (IREF Fellow and Anglo-American University, Prague, Czech Republic)

  • Michael Fanta

    (Jan Evangelista Purkyně University, Ústí nad Labem, Czech Republic)

  • Jan Mosovsky

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)

Abstract

This study aims to investigate the effectiveness of car scrappage schemes implemented in the European Union (EU) during the economic crisis of 2009. The study uses a synthetic control variable and a difference-in-differences method to evaluate these policies. Using monthly data on new passenger car registrations in European countries, the study examines the impact of the schemes. The results show that the impact of scrappage schemes varies across countries, with statistically significant effects observed in Germany and Slovakia, followed by Greece and Italy, albeit limited in some aspects. The results of the study underline the need for careful policy design and show that the effectiveness of car scrappage schemes goes beyond the level of premiums or budget allocations. It is also influenced by other elements such as the duration of the scheme, the overarching policy environment and the novelty of the implementation strategies.

Suggested Citation

  • Miroslav Svoboda & Michael Fanta & Jan Mosovsky, 2023. "Effectiveness of Car Scrappage Schemes: Comparative Analysis of European Countries," Working Papers IES 2023/28, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Sep 2023.
    • Handle: RePEc:fau:wpaper:wp2023_28
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    File URL: https://ies.fsv.cuni.cz/en/effectiveness-car-scrappage-schemes-comparative-analysis-european-countries
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    More about this item

    Keywords

    car scrappage schemes; synthetic control method; difference-in-differences;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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