IDEAS home Printed from https://ideas.repec.org/p/eti/dpaper/23014.html
   My bibliography  Save this paper

Greening Vehicle Fleets: A structural analysis of scrappage programs during the financial crisis

Author

Listed:
  • KITANO Taiju

Abstract

Vehicle scrappage programs (SPs) have been a common policy tool to replace aged and/or fuel-inefficient vehicles with fuel-efficient ones, recently adopted to make national vehicle fleets greener. This study evaluates the impacts of the SPs by examining the Japanese private passenger vehicle market in which the government allocated the second-largest program expenditure during the financial crisis. The evaluation is conducted based on the structural model of oligopolistic competition in the presence of the SP, which is estimated using market-level sales, price, and attribute data for each car model from FY2006 to FY2009. To conduct the structural analysis, this study develops a simple method to estimate the demand side in the presence of the SP, which incorporates data on aggregate program outcomes such as the program expenditure in the estimation of the discrete choice models. Given the estimates of the structural model, I simulate counterfactual outcomes under alternative SP designs and discuss program designs that could cost-effectively improve the environmental quality of vehicle fleets, considering the welfare and fiscal stimulus impacts.

Suggested Citation

  • KITANO Taiju, 2023. "Greening Vehicle Fleets: A structural analysis of scrappage programs during the financial crisis," Discussion papers 23014, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:23014
    as

    Download full text from publisher

    File URL: https://www.rieti.go.jp/jp/publications/dp/23e014.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Pasquale Schiraldi, 2011. "Automobile replacement: a dynamic structural approach," RAND Journal of Economics, RAND Corporation, vol. 42(2), pages 266-291, June.
    2. Ashok Kaul & Gregor Pfeifer & Stefan Witte, 2016. "The incidence of Cash for Clunkers: Evidence from the 2009 car scrappage scheme in Germany," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(6), pages 1093-1125, December.
    3. Arie Beresteanu & Shanjun Li, 2011. "Gasoline Prices, Government Support, And The Demand For Hybrid Vehicles In The United States," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(1), pages 161-182, February.
    4. Yoshifumi Konishi & Meng Zhao, 2017. "Can Green Car Taxes Restore Efficiency? Evidence from the Japanese New Car Market," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(1), pages 51-87.
    5. Koichiro Ito & James M. Sallee, 2018. "The Economics of Attribute-Based Regulation: Theory and Evidence from Fuel Economy Standards," The Review of Economics and Statistics, MIT Press, vol. 100(2), pages 319-336, May.
    6. Taiju Kitano, 2022. "Environmental Policy as a De Facto Industrial Policy: Evidence from the Japanese Car Market," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 60(4), pages 511-548, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tatsuya Abe, 2022. "Welfare Effects of Fuel Tax and Feebate Policies in the Japanese New Car Market," ISER Discussion Paper 1183, Institute of Social and Economic Research, Osaka University.
    2. Tanaka, Shinsuke, 2020. "When tax incentives drive illicit behavior: The manipulation of fuel economy in the automobile industry," Journal of Environmental Economics and Management, Elsevier, vol. 104(C).
    3. Taiju Kitano, 2022. "Environmental Policy as a De Facto Industrial Policy: Evidence from the Japanese Car Market," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 60(4), pages 511-548, June.
    4. Lüth, Hendrik, 2021. "Reassessing Car Scrappage Schemes in Selected OECD Countries: A Synthetic Control Method Application," Working Paper 190/2021, Helmut Schmidt University, Hamburg.
    5. Pavan, Giulia, 2017. "Green Car Adoption and the Supply of Alternative Fuels," TSE Working Papers 17-875, Toulouse School of Economics (TSE).
    6. Fournel, Jean-François, 2023. "Electric Vehicle Subsidies: Cost-Effectiveness and Emission Reductions," TSE Working Papers 23-1465, Toulouse School of Economics (TSE).
    7. Li,Shanjun & Xing,Jianwei & Yang,Lin & Zhang,Fan, 2020. "Transportation and the Environment : A Review of Empirical Literature," Policy Research Working Paper Series 9421, The World Bank.
    8. Pesendorfer, Martin & Schiraldi, Pasquale & Silva-Junior, Daniel, 2023. "Omitted budget constraint bias in discrete-choice demand models," International Journal of Industrial Organization, Elsevier, vol. 86(C).
    9. Helm, Ines & Koch, Nicolas & Rohlf, Alexander, 2023. "The effects of cash for clunkers on local air quality," Journal of Urban Economics, Elsevier, vol. 138(C).
    10. Klößner, Stefan & Pfeifer, Gregor, 2015. "Synthesizing Cash for Clunkers: Stabilizing the Car Market, Hurting the Environment," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113207, Verein für Socialpolitik / German Economic Association.
    11. Marin, Giovanni & Zoboli, Roberto, 2020. "Effectiveness of car scrappage schemes: Counterfactual-based evidence on the Italian experience," Economics of Transportation, Elsevier, vol. 21(C).
    12. Pesendorfer, Martin & Schiraldi, Pasquale & Silva-Junior, Daniel, 2023. "Omitted budget constraint bias in discrete-choice demand models," LSE Research Online Documents on Economics 117353, London School of Economics and Political Science, LSE Library.
    13. Gulati, Sumeet & McAusland, Carol & Sallee, James M., 2017. "Tax incidence with endogenous quality and costly bargaining: Theory and evidence from hybrid vehicle subsidies," Journal of Public Economics, Elsevier, vol. 155(C), pages 93-107.
    14. Kenta Tanaka & Kazuyuki Iwata & Shunsuke Managi, 2021. "MPG Illusion and Vehicle Choice: An Empirical Study of the Japanese Household Survey," Energies, MDPI, vol. 14(21), pages 1-13, November.
    15. Jacquelyn Pless & Arthur A. van Benthem, 2019. "Pass-Through as a Test for Market Power: An Application to Solar Subsidies," American Economic Journal: Applied Economics, American Economic Association, vol. 11(4), pages 367-401, October.
    16. Tatsuya Abe, 2022. "Welfare Effects of Fuel Tax and Feebate Policies in the Japanese New Car Market," Working Papers e172, Tokyo Center for Economic Research.
    17. Kenta TANAKA & Yukihide KURAKAWA & Takunori ISHIHARA & Ken-ichi AKAO & Takanori IDA, 2020. "Moral utility or Moral Tax? Experimental Study of Electricity Conservation by Social Comparison," Discussion papers e-19-011, Graduate School of Economics , Kyoto University.
    18. Soren T. Anderson & James M. Sallee, 2016. "Designing Policies to Make Cars Greener: A Review of the Literature," NBER Working Papers 22242, National Bureau of Economic Research, Inc.
    19. KITANO Taiju, 2013. "Disguised Protectionism? Environmental Policy in the Japanese Car Market," Discussion papers 13059, Research Institute of Economy, Trade and Industry (RIETI).
    20. Laborda, Juan & Moral, María J., 2019. "Scrappage by age: Cash for Clunkers matters!," Transportation Research Part A: Policy and Practice, Elsevier, vol. 124(C), pages 488-504.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eti:dpaper:23014. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: TANIMOTO, Toko (email available below). General contact details of provider: https://edirc.repec.org/data/rietijp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.