This paper examines how a scrappage subsidy affects the lifetime of durable goods when secondhand markets are present. To this end, we propose a vintage model to analyze the replacement decision in an economy in which high and low income agents trade on a durable good. Thus, the existence of a...

This paper studies a model of car replacement designed to evaluate policies addressed to influence replacement decisions. An aggregate hazard function is computed from optimal replacement rules of heterogeneous consumers, which mimics the hump—shaped hazard function observed for the Spanish...

This paper studies a model of car replacement designed to evaluate policies addressed to influence replacement decisions. An aggregate hazard function is computed from optimal replacement rules of heterogeneous consumers, which mimics the hump-shaped hazard function observed for the Spanish car...