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A quantitative model of accelerated vehicle-retirement induced by subsidy

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  • Lorentziadis, Panos L.
  • Vournas, Stylianos G.

Abstract

A number of accelerated vehicle-retirement programs have been implemented by private companies and public agents to reduce pollution and promote environment friendly technology. Our paper examines subsidy programs for the acquisition of a new low-pollution vehicle, provided that an old technology unit is retired. A model is developed to determine the appropriate subsidy level that induces the replacement of a specified number of existing old technology units within a given time period. Alternatively, given the subsidy level, the model allows the determination of the required time period to achieve a desired replacement target. In this way, the proposed method could be used to assess the effectiveness of a subsidy-based policy of accelerated vehicle-retirement in reaching a targeted number of scraped vehicles within a specified time framework.

Suggested Citation

  • Lorentziadis, Panos L. & Vournas, Stylianos G., 2011. "A quantitative model of accelerated vehicle-retirement induced by subsidy," European Journal of Operational Research, Elsevier, vol. 211(3), pages 623-629, June.
    • Handle: RePEc:eee:ejores:v:211:y:2011:i:3:p:623-629
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    Cited by:

    1. Xiangyun Chang & Junjie Fan & Yabing Zhao & Jie Wu, 2016. "Impact of China’s Recycling Subsidy Policy in the Product Life Cycle," Sustainability, MDPI, vol. 8(8), pages 1-21, August.
    2. Huang, Jian & Leng, Mingming & Liang, Liping & Luo, Chunlin, 2014. "Qualifying for a government’s scrappage program to stimulate consumers’ trade-in transactions? Analysis of an automobile supply chain involving a manufacturer and a retailer," European Journal of Operational Research, Elsevier, vol. 239(2), pages 363-376.
    3. Zaman, Hosain & Zaccour, Georges, 2020. "Vehicle scrappage incentives to accelerate the replacement decision of heterogeneous consumers," Omega, Elsevier, vol. 91(C).
    4. Huang, Zhenhua & Fan, Hongqin, 2022. "Responsibility-sharing subsidy policy for reducing diesel emissions from in-use off-road construction equipment," Applied Energy, Elsevier, vol. 320(C).

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