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The Effects of Cash for Clunkers on Local Air Quality

Author

Listed:
  • Ines Helm
  • Nicolas Koch
  • Alexander Rohlf
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.

Suggested Citation

  • Ines Helm & Nicolas Koch & Alexander Rohlf, 2023. "The Effects of Cash for Clunkers on Local Air Quality," CESifo Working Paper Series 10530, CESifo.
    • Handle: RePEc:ces:ceswps:_10530
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp10530.pdf
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    References listed on IDEAS

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    Cited by:

    1. Li, Shanjun & Wang, Binglin & Zhou, Hui, 2024. "Decarbonizing passenger transportation in developing countries: Lessons and perspectives1," Regional Science and Urban Economics, Elsevier, vol. 107(C).

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    More about this item

    Keywords

    cash for clunkers; local air quality; car scrappage schemes; emissions; car rebate;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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