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Michael Hicks and Nalitra Thaiprasert
''A first look at the 'Cash for Clunkers' program''
( 2012, Vol. 32 No.1 )
This paper estimates the short run effect of the Car Allowance Rebate System (or “Cash for Clunkers” on light vehicle sales within the United States. Using a reduced form demand model of automobiles, We find that the program led to increased sales in July and August, 2009 of between 450,000 and 710,000 vehicles. Further, We find that the pre-announcement of the program did not reduce sales in June 2009. Further, We can reject a ‘Cash for Clunkers' associated decline in automobile sales in the months immediately following the termination of the program.
Keywords: Cash for Clunkers, automobile, subsidies
JEL: E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General
H2 - Taxation, Subsidies, and Revenue: General
Manuscript Received : Sep 28 2010 Manuscript Accepted : Feb 08 2012

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