The effects of replacement schemes on car sales: the Spanish case

Omar Licandro () and Antonio Sampayo

No ECO2005/20, Economics Working Papers from European University Institute

Abstract: This paper studies a model of car replacement designed to evaluate policies addressed to influence replacement decisions. An aggregate hazard function is computed from optimal replacement rules of heterogeneous consumers, which mimics the hump-shaped hazard function observed for the Spanish car market. The model is calibrated to evaluate quantitatively the Plan Prever, a replacement scheme introduced in Spain in 1997, finding that the positive effect of the subsidy is high in the short run but small in the long run for both sales and the average age of the stock.

Keywords: scrapping; replacement schemes; heterogeneous consumers (search for similar items in EconPapers)
JEL-codes: D12 H31 (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-bec and nep-pbe
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Citations: View citations in EconPapers (2)

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Journal Article: The effects of replacement schemes on car sales: the Spanish case (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:eui:euiwps:eco2005/20

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