Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278964 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 16266
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We study the effects of a large car scrappage scheme in Germany on new car purchases and local air quality by combining vehicle registration data with data on local air pollutant emissions. For identification we exploit cross-sectional variation across districts in the number of cars eligible for scrappage. The scheme had substantial effects on car purchases and did not simply reallocate demand across time in the short-term. Nevertheless, about half of all subsidized buyers benefited from windfall gains. The renewal of the car stock improved local air quality suggesting substantial mortality benefits that likely exceed the cost of the policy. While policy take-up is somewhat smaller in urban districts, improvements in air quality and health tend to be larger due to a higher car density.
Subjects: 
cash for clunkers
local air quality
car scrappage schemes
emissions
car rebate
JEL: 
H20
H23
Q53
Q58
Document Type: 
Working Paper

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