The effect of the “Cash for Clunkers” program on the overall fuel economy of purchased new vehicles

Abstract

This study evaluated the effects of the U.S vehicle-scrappage program (“Cash for Clunkers”) on the average fuel economy of new vehicles purchased in July and August 2009. The predicted, baseline fuel economy, without the existence of the program, was derived using a model obtained from a regression analysis performed on the data from October 2007 through June 2009. The regression used the unemployment rate and the price of gasoline as the predictors of the fuel economy. The results indicate that the program improved the average fuel economy of all vehicles purchased by 0.6 mpg in July 2009 and 0.7 mpg in August 2009.