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Does Government Activism Affect Second-hand Car Prices? Evidence from a Natural Experiment

Saibal Ghosh

Margin: The Journal of Applied Economic Research, 2018, vol. 12, issue 1, 1-18

Abstract: A significant body of literature has focused on the impact of policy changes on consumption behaviour. Most of this literature looks at the impact of anticipated and durable changes, thereby ignoring the impact of unanticipated changes. In this context, exploiting a unique data set for India, the article examines the impact of a temporary ‘odd–even’ policy experiment in Delhi on second-hand car prices. The findings suggest that car prices on average, declined by 2.7 per cent after the policy announcement, although these prices subsequently recouped the initial losses. A disaggregation of car prices in terms of costs indicates that these results are driven by low-priced cars and, additionally, that cars with odd-number ending registrations commanded a premium in the market.

Keywords: Car Price; Odd–Even Rule; Delhi (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:sae:mareco:v:12:y:2018:i:1:p:1-18