Vehicle retirement programs have become popular tools of public policy for reducing pollution. The efficacy of these programs is difficult to measure, as it is difficult to tell how much a vehicle would have polluted otherwise. I estimate that counterfactual using data from a long-running local program in California. I utilize the universe
of emissions inspections from the California Smog Check Program to construct vehicle usage histories of retired cars and similar vehicles which did not retire early. I find that the program's cost-effectiveness steadily declined over time because of the depreciation of the vehicle fleet, while adverse selection remained a problem throughout. (JEL D82, Q53, Q58, R48)
"Clunkers or Junkers? Adverse Selection in a Vehicle Retirement Program."
American Economic Journal: Economic Policy,
Asymmetric and Private Information; Mechanism Design
Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
Environmental Economics: Government Policy
Transportation Systems: Government Pricing and Policy