Liveable planet lunch meeting - Free-riding on scrappage subsidies
- Thursday 19 May 2022
- Liveable communities – Liveable Planet
- Hybride: live in the van Steenis building, room F1.04 and online in MS Teams
You are invited to join us for the thirteenth lunch meeting of the Liveable Planet programme lunch series. This meeting will be a hybrid meeting: the meeting can be attended live in the van Steenis building F1.04 or online in MS Teams (see link at the bottom of this page).
Short introduction | all webcams on
Dr. Hendrik Vrijburg will take the stage for a short presentation, followed by an opportunity to discuss:
Free-riding on scrappage subsidies: Evidence from a vehicle retirement acceleration programme in the Netherlands
Scrappage subsidies are often viewed as an effective policy instrument to stimulate economic activity during periods of recession and to massively replace old and polluting durable goods with newer, cleaner and more energy-efficient ones. However, the effectiveness of such subsidies in reaching their environmental and economic goals is frequently hampered by adverse selection, which enables participants to free-ride on the subsidy or to undertake only minimal behaviour changes.
We study Dutch vehicle owners’ behavioural responses to a nationwide programme offering a subsidy to those scrapping an old light-duty vehicle and replacing it with a newer and cleaner one. Using a unique dataset on all vehicle registrations and retirements in a six-year period and a triple-difference approach, we empirically estimate the effects of the policy.
We find that the policy was successful in removing old vehicles earlier from the roads, in temporarily stimulating economic activity in the car market and in accelerating the greening of the vehicle fleet. Only a very small share of participants can be characterised as pure free-riders, i.e. individuals who would have anyway scrapped their old vehicle and replaced it with an eligible one in the year the policy was implemented. However, most participants receive a subsidy only for offering a functional vehicle for scrap instead of selling it on the second-hand market – a likely costless change for them. On the purchase side, the policy may only have induced individuals that would anyway buy an eligible vehicle to bring their decision forward.
Liveable communities – Liveable Planet
The Liveable Planet programme is one of the eight interdisciplinary programmes that were launched at Leiden University in 2020
Leiden’s Liveable Planet programme aims to combine scientific, policy, socio-cultural and historical/archaeological research at Leiden University into coherent research with which we can tackle the major challenges of a transition to a habitable planet with ecological sustainability. The programme will serve as a hub for the wide range of relevant research carried out within Leiden University and welcomes interaction with colleagues interested in contributing to the initiative within as well as outside of Leiden University.