Accelerator or Brake? Cash for Clunkers, Household Liquidity, and Aggregate Demand
<jats:p> This paper evaluates the Car Allowance Rebate System (CARS ) by comparing the vehicle purchases and disposals of households with eligible “clunkers” to those of households with similar but ineligible vehicles. CARS caused roughly 500,000 purchases during the program period. The provis...
| Main Authors: | , , , |
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| Other Authors: | |
| Format: | Article |
| Language: | English |
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American Economic Association
2021
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| Online Access: | https://hdl.handle.net/1721.1/135267 |
| _version_ | 1811070355461111808 |
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| author | Green, Daniel Melzer, Brian T Parker, Jonathan A Rojas, Arcenis |
| author2 | Sloan School of Management |
| author_facet | Sloan School of Management Green, Daniel Melzer, Brian T Parker, Jonathan A Rojas, Arcenis |
| author_sort | Green, Daniel |
| collection | MIT |
| description | <jats:p> This paper evaluates the Car Allowance Rebate System (CARS ) by comparing the vehicle purchases and disposals of households with eligible “clunkers” to those of households with similar but ineligible vehicles. CARS caused roughly 500,000 purchases during the program period. The provision of liquidity, through a rebate usable as a down payment, was critical in generating this large response. Participation was rare among households that owned clunkers with outstanding loans, which required loan repayment. This decline in participation is attributed to households’ preference for lower down payments and distinguished from the effects of income, other indebtedness, and the program subsidy. (JEL E23, E62, G51, H24, H31) </jats:p> |
| first_indexed | 2024-09-23T08:34:38Z |
| format | Article |
| id | mit-1721.1/135267 |
| institution | Massachusetts Institute of Technology |
| language | English |
| last_indexed | 2024-09-23T08:34:38Z |
| publishDate | 2021 |
| publisher | American Economic Association |
| record_format | dspace |
| spelling | mit-1721.1/1352672023-09-28T20:20:02Z Accelerator or Brake? Cash for Clunkers, Household Liquidity, and Aggregate Demand Green, Daniel Melzer, Brian T Parker, Jonathan A Rojas, Arcenis Sloan School of Management <jats:p> This paper evaluates the Car Allowance Rebate System (CARS ) by comparing the vehicle purchases and disposals of households with eligible “clunkers” to those of households with similar but ineligible vehicles. CARS caused roughly 500,000 purchases during the program period. The provision of liquidity, through a rebate usable as a down payment, was critical in generating this large response. Participation was rare among households that owned clunkers with outstanding loans, which required loan repayment. This decline in participation is attributed to households’ preference for lower down payments and distinguished from the effects of income, other indebtedness, and the program subsidy. (JEL E23, E62, G51, H24, H31) </jats:p> 2021-10-27T20:22:42Z 2021-10-27T20:22:42Z 2020 2021-03-24T17:06:35Z Article http://purl.org/eprint/type/JournalArticle https://hdl.handle.net/1721.1/135267 en 10.1257/POL.20170122 AEJ: Economic Policy Creative Commons Attribution 4.0 International license https://creativecommons.org/licenses/by/4.0/ application/pdf American Economic Association PLoS |
| spellingShingle | Green, Daniel Melzer, Brian T Parker, Jonathan A Rojas, Arcenis Accelerator or Brake? Cash for Clunkers, Household Liquidity, and Aggregate Demand |
| title | Accelerator or Brake? Cash for Clunkers, Household Liquidity, and Aggregate Demand |
| title_full | Accelerator or Brake? Cash for Clunkers, Household Liquidity, and Aggregate Demand |
| title_fullStr | Accelerator or Brake? Cash for Clunkers, Household Liquidity, and Aggregate Demand |
| title_full_unstemmed | Accelerator or Brake? Cash for Clunkers, Household Liquidity, and Aggregate Demand |
| title_short | Accelerator or Brake? Cash for Clunkers, Household Liquidity, and Aggregate Demand |
| title_sort | accelerator or brake cash for clunkers household liquidity and aggregate demand |
| url | https://hdl.handle.net/1721.1/135267 |
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