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Effectiveness of car scrappage schemes: Counterfactual-based evidence on the Italian experience

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  • Marin, Giovanni
  • Zoboli, Roberto

Abstract

Car scrappage schemes are generally introduced to upgrade the car fleet to reduce environmental pressures from private transportation. The aim of this paper is to present a combined use of two counterfactual techniques (RDD and DiD) to quantify the impact of Italian car scrappage schemes of 2007–2009 on the deregistration of cars. The empirical assessment of the policy effectiveness is made possible by a discontinuity in the age of cars that were eligible for the subsidy. In the DiD model we also introduce a variable on ‘product innovation’ in the car market as a factor that determines scrappage timing. Results, based on detailed information on the car fleet and the deregistration of cars in Italy, suggest no impact for the 2007 and 2008 schemes and a large impact for the 2009 scheme, which was based on rather high incentives. Results are robust to both counterfactual approaches and to different tests.

Suggested Citation

  • Marin, Giovanni & Zoboli, Roberto, 2020. "Effectiveness of car scrappage schemes: Counterfactual-based evidence on the Italian experience," Economics of Transportation, Elsevier, vol. 21(C).
    • Handle: RePEc:eee:ecotra:v:21:y:2020:i:c:s221201221930005x
    DOI: 10.1016/j.ecotra.2019.100150
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    Cited by:

    1. Hanadi Al-Thani & Muammer Koç & Rima J. Isaifan & Yusuf Bicer, 2022. "A Review of the Integrated Renewable Energy Systems for Sustainable Urban Mobility," Sustainability, MDPI, vol. 14(17), pages 1-27, August.
    2. Lüth, Hendrik, 2021. "Reassessing Car Scrappage Schemes in Selected OECD Countries: A Synthetic Control Method Application," Working Paper 190/2021, Helmut Schmidt University, Hamburg.
    3. Mariano Gallo & Mario Marinelli, 2020. "Sustainable Mobility: A Review of Possible Actions and Policies," Sustainability, MDPI, vol. 12(18), pages 1-39, September.
    4. Viri, Riku & Mäkinen, Johanna & Liimatainen, Heikki, 2021. "Modelling car fleet renewal in Finland: A model and development speed-based scenarios," Transport Policy, Elsevier, vol. 112(C), pages 63-79.

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    More about this item

    Keywords

    Car scrappage schemes; Regression discontinuity design; Difference-in differences; Product innovation; Environmental policy effectiveness;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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