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Vehicle Lifetime and Scrappage Behavior: Trends in the U.S. Used Car Market

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  • Antonio Bento
  • Kevin Roth
  • Yiou Zuo

Abstract

Using national data on vehicles in operation, we examine long-run changes in scrappage patterns in passenger cars and light trucks in the United States between 1969 and 2014. We find that the average lifetime for passenger cars has increased from 12.2 to 15.6 years between 1970s and the 2000s. Our central estimate of the elasticity of scrappage with respect to vehicle prices is -0.4, which is substantially different than values adopted in simulation models. These estimates imply that many policies aimed at reducing gasoline consumption, including Corporate Average Fuel Economy standards and gasoline taxes may produce changes in the used vehicle market that are different than prior studies suggest. We also note that consumer scrappage behavior seems to respond more strongly to changes in vehicle price than changes in gasoline price than standard theory would predict.

Suggested Citation

  • Antonio Bento & Kevin Roth & Yiou Zuo, 2018. "Vehicle Lifetime and Scrappage Behavior: Trends in the U.S. Used Car Market," The Energy Journal, , vol. 39(1), pages 159-184, January.
    • Handle: RePEc:sae:enejou:v:39:y:2018:i:1:p:159-184
    DOI: 10.5547/01956574.39.1.aben
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    References listed on IDEAS

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    4. Sallee, James M. & West, Sarah E. & Fan, Wei, 2016. "Do consumers recognize the value of fuel economy? Evidence from used car prices and gasoline price fluctuations," Journal of Public Economics, Elsevier, vol. 135(C), pages 61-73.
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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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