Sorting in the used-car market after the Volkswagen emission scandal

Anthony Strittmatter and Michael Lechner

Journal of Environmental Economics and Management, 2020, vol. 101, issue C

Abstract: The disclosure of the VW emission manipulation scandal caused a quasi-experimental market shock to the observable environmental quality of VW diesel vehicles. To investigate the impact of environmental quality on the market, we collect data from a used-car online advertisement platform. We find that the supply of used VW diesel vehicles increases after the VW emission scandal. The positive supply effects increase with the probability of manipulation. Furthermore, we find negative impacts on the asking prices of used cars subject to a high probability of manipulation. We rationalize these findings with a model for sorting by the environmental quality of used cars.

Keywords: Supply of used cars; Environmental quality; Sorting; Difference-in-differences; Management fraud (search for similar items in EconPapers)
JEL-codes: L15 L62 Q59 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Working Paper: Sorting on the Used-Car Market After the Volkswagen Emission Scandal (2019)
Working Paper: Sorting on the Used-Car Market After the Volkswagen Emission Scandal (2017)
Working Paper: Sorting on the Used-Car Market After the Volkswagen Emission Scandal (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:101:y:2020:i:c:s0095069620300280

DOI: 10.1016/j.jeem.2020.102305

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