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The impact of scrappage programmes on the demand for new vehicles: Evidence from Spain

Pedro Cantos-Sánchez (), Eva Gutiérrez-i-Puigarnau and Ismir Mulalic ()

Research in Transportation Economics, 2018, vol. 70, issue C, 83-96

Abstract: We evaluate the impact of the Spanish car scrappage programme introduced in May 2009 on short-run car purchases. The scrappage programme was simultaneously discussed and implemented and was therefore exogenous to the consumers. We analyse the effect of this programme on household new car purchase decision and household expenditures. The results show that the scrappage programme increased the probability of buying a new car but decreased the mean expenditure devoted to the purchase of this new vehicle. We also evaluate the effect of financial aid on household welfare. Our best estimate of the welfare gain related to the scrappage programme is very similar to the aid of €1000 offered by the public administrations.

Keywords: Car demand; Scrappage programme; Cash for clunkers; Economic crisis; Public subsidies; AIDS model; Household behaviour (search for similar items in EconPapers)
JEL-codes: H20 R21 (search for similar items in EconPapers)
Date: 2018
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Working Paper: The impact of scrappage programs on the demand for new vehicles: Evidence from Spain (2015) Downloads
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DOI: 10.1016/j.retrec.2017.11.006

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