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Fleet Turnover and Old Car Scrap Policies

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  • Harrington, Winston

    () (Resources for the Future)

  • McConnell, Virginia

    () (Resources for the Future)

  • Alberini, Anna

Abstract

This paper incorporates owners' decisions to keep, repair or scrap their old vehicles into a simulation model of fleet emissions. This decision depends critically on the owner's perceived value of the vehicle, so we examine the factors affecting owners' valuations of their old vehicles using a unique longitudinal dataset. Willingness to accept for the vehicle is well predicted by mileage and condition of the car, and declines systematically with its age. Our estimated model of vehicle value is used as an input into a simulation model of a 1,000-car fleet representative of California's fleet. Other inputs into the simulation models are the estimated distributions of emissions in the fleet, and two equations that link emissions reductions to the cost of repairs. The simulation model is used to examine the role of scrap policies alone and combined with other policies for reducing emissions, such as current I/M programs and proposed emissions fees, and the welfare implications of combining such programs. The model incorporates both technical and behavioral relationships, and assumes that of all possible options (repairing the car, scrapping the vehicle, or paying the emissions fee without repairing the vehicle) the owner chooses the one with the least cost. We find that old car scrap programs may increase net welfare under a regulatory program like I/M in practice today, but that a stand alone scrap program is unlikely to provide very much in the way of emission reductions.

Suggested Citation

  • Harrington, Winston & McConnell, Virginia & Alberini, Anna, 1998. "Fleet Turnover and Old Car Scrap Policies," Discussion Papers dp-98-23, Resources For the Future.
  • Handle: RePEc:rff:dpaper:dp-98-23
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    File URL: http://www.rff.org/RFF/documents/RFF-DP-98-23.pdf
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    References listed on IDEAS

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    1. Small, K.A. & Kazimi, C., 1994. "On the Costs of Air Pollution from Motor Vehicules," Papers 94-95-3, California Irvine - School of Social Sciences.
    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 251-265, May.
    3. Charles F. Manski & Ephraim Goldin, 1983. "An Econometric Analysis of Automobile Scrappage," Transportation Science, INFORMS, vol. 17(4), pages 365-375, November.
    4. Kazimi, Camilla, 1997. "Evaluating the Environmental Impact of Alternative-Fuel Vehicles," Journal of Environmental Economics and Management, Elsevier, vol. 33(2), pages 163-185, June.
    5. Parks, Richard W, 1977. "Determinants of Scrapping Rates for Postwar Vintage Automobiles," Econometrica, Econometric Society, vol. 45(5), pages 1099-1115, July.
    6. Robert W. Hahn, 1995. "An Economic Analysis of Scrappage," RAND Journal of Economics, The RAND Corporation, vol. 26(2), pages 222-242, Summer.
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    Cited by:

    1. World Bank, 2012. "A Policy Framework for Green Transportation in Georgia : Achieving Reforms and Building Infrastructure for Sustainability," World Bank Other Operational Studies 11899, The World Bank.
    2. Lawrence Goulder & Mark Jacobsen & Arthur van Benthem, 2009. "Unintended Consequences from Nested State & Federal Regulations: The Case of the Pavley Greenhouse-Gas-per-Mile Limits," Discussion Papers 08-049, Stanford Institute for Economic Policy Research.
    3. Goulder, Lawrence H. & Jacobsen, Mark R. & van Benthem, Arthur A., 2012. "Unintended consequences from nested state and federal regulations: The case of the Pavley greenhouse-gas-per-mile limits," Journal of Environmental Economics and Management, Elsevier, vol. 63(2), pages 187-207.
    4. Rita Pandey, 2006. "Looking beyond inspection and maintenance in reducing pollution from in-use vehicles," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 7(4), pages 435-457, December.
    5. Garrone Giovanna, 2004. "Scrapping old cars for reducing air pollution: an environmental evaluation of the Italian 1997-1998 incentive policy," Department of Economics and Statistics Cognetti de Martiis. Working Papers 200404, University of Turin.
    6. Maxim Engers & Monica Hartmann & Steven Stern, 2009. "Annual miles drive used car prices," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(1), pages 1-33.
    7. Palmer, Karen & Macauley, Molly & Shih, Jhih-Shyang & Cline, Sarah & Holsinger, Heather, 2001. "Modeling the Costs and Environmental Benefits of Disposal Options for End-of-Life Electronic Equipment: The Case of Used Computer Monitors," Discussion Papers dp-01-27, Resources For the Future.
    8. Harrington, Winston & McConnell, Virginia & Cannon, Matthew, 1998. "A Behavioral Analysis of EPA's MOBILE Emission Factor Model," Discussion Papers dp-98-47, Resources For the Future.
    9. Lawrence H. Goulder & Mark R. Jacobsen & Arthur A. van Benthem, 2009. "Unintended Consequences from Nested State & Federal Regulations: The Case of the Pavley Greenhouse-Gas-per-Mile Limits," NBER Working Papers 15337, National Bureau of Economic Research, Inc.

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