Clunkers or Junkers? Adverse Selection in a Vehicle Retirement Program

Ryan Sandler

American Economic Journal: Economic Policy, 2012, vol. 4, issue 4, 253-81

Abstract: Vehicle retirement programs have become popular tools of public policy for reducing pollution. The efficacy of these programs is difficult to measure, as it is difficult to tell how much a vehicle would have polluted otherwise. I estimate that counterfactual using data from a long-running local program in California. I utilize the universe of emissions inspections from the California Smog Check Program to construct vehicle usage histories of retired cars and similar vehicles which did not retire early. I find that the program's cost-effectiveness steadily declined over time because of the depreciation of the vehicle fleet, while adverse selection remained a problem throughout. (JEL D82, Q53, Q58, R48)

JEL-codes: D82 Q53 Q58 R48 (search for similar items in EconPapers)
Date: 2012
Note: DOI: 10.1257/pol.4.4.253
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Citations: View citations in EconPapers (26)

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