EconPapers    
Economics at your fingertips  
 

Equilibrium Trade in Automobile Markets

Kenneth Gillingham (), Fedor Iskhakov (), Anders Munk-Nielsen, John Rust () and Bertel Schjerning

No 25840, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We introduce a computationally tractable dynamic equilibrium model of the automobile market where new and used cars of multiple types (e.g. makes/models) are traded by heterogeneous consumers. Prices and quantities are determined endogenously to equate supply and demand for all car types and vintages, along with the ages at which cars are scrapped. The model allows for transactions costs, taxes, flexible specifications of car characteristics, consumer preferences, and heterogeneity. We apply the model to two examples: a revenue-neutral replacement of the new vehicle registration tax with a higher fuel tax and a hypothetical “merger to monopoly” in an oligopolistic new car market. We show substantial gains in consumer welfare from the tax policy change, as well as important effects on government revenues, automobile prices, driving, fuel consumption and CO 2 emissions, while the merger leads to substantial welfare losses.

JEL-codes: L9 L98 Q4 Q5 R4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-ene, nep-ind and nep-tre
Date: 2019-05
Note: EEE IO
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.nber.org/papers/w25840.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
Working Paper: Equilibrium trade in automobile markets (2019) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:25840

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w25840
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2019-08-10
Handle: RePEc:nbr:nberwo:25840