Cash for Corollas: When Stimulus Reduces Spending / Mark Hoekstra, Steven L. Puller, Jeremy West.

Format:

Book

Author/Creator:

Hoekstra, Mark.

Contributor:

National Bureau of Economic Research.

Puller, Steven L.

West, Jeremy.

Series:

Working Paper Series (National Bureau of Economic Research) no. w20349.

NBER working paper series no. w20349

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Cash for Corollas

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2014.

Summary:

The 2009 Cash for Clunkers program aimed to stimulate consumer spending in the new automobile industry, which was experiencing disproportionate reductions in demand and employment during the Great Recession. Exploiting program eligibility criteria in a regression discontinuity design, we show nearly 60 percent of the subsidies went to households who would have purchased during the two-month program anyway; the rest accelerated sales by no more than eight months. Moreover, the program's fuel efficiency restrictions shifted purchases toward vehicles that cost on average $5,000 less. On net, Cash for Clunkers significantly reduced total new vehicle spending over the ten month period.

Notes:

Print version record

July 2014.