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How Consumers Respond to the Phase-Out of Attribute-Based Subsidies: Evidence from the Chinese Electric Vehicle Market

Author

Listed:
  • Yanfei Wang

    (Business School, Renmin University of China)

  • Xiongfei Guo

    (School of International Trade and Economics, University of International Business and Economics)

  • Wei Lin

    (School of International Trade and Economics, University of International Business and Economics)

  • Yue Niu

    (School of International Trade and Economics, University of International Business and Economics)

Abstract

This paper examines consumer responses to the 2020 phase-out of electric vehicle (EV) subsidies in China using a Difference-in-Differences (DD) strategy with monthly sales data. We uncover heterogeneous responses across different EV models, with significant impacts observed in the group facing a two-stage subsidy reduction. Moreover, evidence of forward-looking behavior indicates consumers adjusted their purchasing decisions in anticipation of future subsidy cuts. These findings highlight the significance of nuanced policy design in fostering sustainable EV adoption.

Suggested Citation

  • Yanfei Wang & Xiongfei Guo & Wei Lin & Yue Niu, 2024. "How Consumers Respond to the Phase-Out of Attribute-Based Subsidies: Evidence from the Chinese Electric Vehicle Market," Annals of Economics and Finance, Society for AEF, vol. 25(2), pages 551-574, November.
    • Handle: RePEc:cuf:journl:y:2024:v:25:i:2:wangguolinniu
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    More about this item

    Keywords

    Industrial policy; Difference-in-Differences; Inter-temporal effects; Electric vehicle market;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

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