I study the impact of subsidies for Plug-in hybrid vehicles (PHEV) on carbon emissions. I show that subsidizing innovations without considering consumer behavior can harm the environment. I provide descriptive evidence on charging instances of PHEV and combine it with a structural model of...

Certain features of imported second-hand cars (e.g., age, degree of wear and tear, technical design) can increase their likelihood for traffic crashes. Three official datasets which cover an eight year period (2008–2015) are used to test the connection between importation of second-hand cars...

Competitive industries respond to positive demand-side and negative supply-side shocks in predictable ways. Prices will rise and, under some conditions, margins along with them. Margins may rise because of supply shocks, but they do so in competitive markets without collusion among producers....

This paper examines the efficiency and distributional effects of fuel tax and feebate policies in the automobile market. I employ a model in which households make two-stage decisions on car ownership and utilization, and I estimate model parameters by combining micro-level data from a household...

Purpose: The automobile industry has been widely accepted as a major influencer in the growth of country’s economy and an important contributor to the global market as well. It is also been considered as a capital-intensive industry with the scope of vertical integration and economies of...

This paper provides evidence on the consumption effects of trade shocks by exploiting changes in US and Chinese trade policy between 2017 and 2018. The analysis uses a unique data set with the universe of new auto sales at the US county level, at a monthly frequency, and a simple...

Between 1990 and 2019, the European transport sector was expected to reduce its CO2 emissions by 40 per cent to keep track with the 100 per cent CO2 reduction target on the 1990 level set by the European Commission for 2050. But, in fact, the transport sector has increased its CO2 emissions by...

The transition to a green economy strongly depends on the existence of appropriate economic incentives for agents. The loan market for car purchases is a paradigmatic example in this respect, as lenders may set credit conditions which may discourage or support the purchase of high emission...

This paper exploits the unique experiment of European market integration to investigate the relationship between integration and price convergence in international markets. Using a panel data set of car prices we examine how the process of integration has affected cross-country price dispersion...

We investigate the effects of 2015 Volkswagen diesel emissions scandal in the Taiwanese new car market. Using a difference-in-differences empirical strategy and administrative data on new car registrations, we find that quarterly sales of Volkswagen fell by more than 20% in self-use market. But...

Despite the European Commission’s concrete steps to integrate the national car markets and reduce car price dispersion, significant car price differences exist. Moreover, international differences in taxation of sales and registration of motor vehicles do not give rise to considerable...

Prominent features of differentiated product markets are segmentation and product proliferation blurring the boundaries between segments. I develop a tractable demand model, the Ordered Nested Logit, which allows for asymmetric substitution between segments. I apply the model to the automobile...

Distribution cartels in the automotive sector used to be frequently dismantled and sanctioned by the European Commission and the EU Courts still some 15 years ago. In recent years, however, only a few cases have been reported at the national level of EU Member States. Is it because the...

This article tests the effects of fuel economy and greenhouse gas emission standards on the direction of innovation, in particular on breakthrough technologies in the automotive industry. We develop an intuitive measure of standard stringency that captures the policy's most important features...

Purpose - Role of digital channels in car buying has increased manifold and consumers are making significant use of various digital channels throughout the decision-making process. However, there are very less number of studies available if one wishes to understand the specific reason(s) for the...

Did the 1973 and 1979 gasoline price rises change consumer views about the relative quality of different cars? This question is investigated by testing the null hypothesis that imputed characteristic prices have remained constant over time. A hedonic model that takes gasoline costs into account...

I develop a technique useful for obtaining more precise estimates of demand and supply curves when constrained to market-level data. It augments the estimation routine with data on the average characteristics of consumers that purchase different products. I apply the technique to the automobile...

Recent studies have used import data to assess the impact of foreign varieties on prices and welfare for a home country. The reliance on import data has a number of limitations. First, these papers rely on goods categories defined by the Harmonized System. Second, they define varieties using the...

We investigate whether the first digit of an odometer reading is more salient to consumers than subsequent digits. We find that retail transaction prices and volumes of used vehicles drop discontinuously at 10,000-mile odometer thresholds, echoing effects found in the wholesale market by...

This paper looks empirically into the behavior of multinational firms in international oligopolistic markets with trade balance constraints. I show how a particular form of non-tariff barrier applied at the firm level can lead to an increase in trade flows in the presence of intra-firm strategic...

Car prices in Europe are characterized by large and persistent differences across countries. The purpose of this paper is to document and explain this price dispersion. Using a panel data set extending from 1980 to 1993, we first demonstrate two main facts concerning car prices in Europe: (1)...

In this paper, we exploit new sources of cross-sectional data to estimate a detailed product-level demand system for new passenger vehicles. We use four data sources: on the characteristics of products, on the attributes of the U.S. population of households, on the match between the first and...

This paper studies the effects of subsidies on durable goods markets. In particular, we study a recent policy in France in which the governments of Balladur and Jupp‚ subsidized the replacement of old cars with new ones. To study this policy, we construct a dynamic stochastic discrete choice...

Subsidy programs are widely used by governments to stimulate durable goods sectors. This paper investigates the impact of government subsidy on consumers' automobile replacement decisions in the context of the U.S. Car Allowance and Rebate System program in 2009. I develop and estimate a dynamic...

In neoclassical economics a concept of individual is seen as a logical thinking machine, which accurately analyzes all information received and, based on it, makes decisions that maximize his/her personal gain and minimize risks while achieving his/her goals. Such behavior of a person is called...

This case series simulates the decision of choosing and financing a car. Reggie Fuller is a fry cook on the verge of losing his job if he keeps arriving late to work due to inconsistent public buses. Fuller's dream car, the Lincoln MKS, is priced far beyond his budget ($50,000), but Fuller...

Our purpose in this paper is to develop and estimate a model of the US automobile industry that can be used to analyze the secular and cyclical strategic markup behavior and market structure of its three major domestic producers - - GM, Ford and Chrysler. The principal novelty in this paper is...

We present a methodology for estimating the welfare gains from a productwith new characteristics, and apply it to Japanese and American compacttrucks. Our approach can be used on any products for which a hedonicregression can be estimated. For 1979-80 we find average welfare gains of$500-600 per...

India is one among the world’s quickest growing automobile markets and is poised to become the third largest passenger’s automobile market by 2020 . The recorded sales growth of four wheelers like car & utility vehicle has additionally up up to 7.87 % and 6.25% severally throughout...

This paper has a simple goal, that of understanding the joint behaviorof prices and quantities in a particular market. More precisely, it examines whether we can find decision problems for suppliers and buyers, together with a market equilibrium structure, which are consistent with the observed...

Subsidies have become increasingly popular for policy makers to promote the adoption of ecofriendly new technologies. Normally, the costs of these subsidies are nontrivial, underscoring the need to determine their efficacy. This work examines one subsidy used to steer consumers away from...