Template-Type: ReDIF-Paper 1.0
Author-Name: Marita Laukkanen
Author-Name-First: Marita
Author-Name-Last: Laukkanen
Author-Email: marita.laukkanen@tuni.fi
Author-Workplace-Name: Tampere University, Finnish Centre of Excellence in Tax Systems Research
Author-Name: Anna Sahari
Author-Name-First: Anna
Author-Name-Last: Sahari
Author-Email: anna.sahari@vatt.fi
Author-Workplace-Name: VATT Institute for Economic Research, Finnish Centre of Excellence in Tax Systems Research
Title: Heterogeneous Responses to Vehicle Replacement Subsidies: Evidence from Linked Vehicle Owner Data
Abstract: This study examines how vehicle owners respond to vehicle replacement subsidies, using administrative data covering the universe of Finnish passenger vehicles and their owners to evaluate a subsidy program implemented in 2018. The subsidy increased new car purchases, with 66 percent of subsidized purchases estimated to be additional. The effects of the program on new car purchases varied across a number of vehicle and household characteristics, while the effects on the emissions of new vehicles did not differ significantly. On average, the program reduced CO2 emissions at a cost of e 184 per ton, though cost-effectiveness varied substantially across vehicle-owner subgroups. 
Length: 43
Creation-Date: 2025-10
Publication-Status: Published in FIT Working Paper Series, Finnish Center of Excellence in Tax Systems Research
File-URL: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://verotutkimus.fi/verotutkimus/wp-content/uploads/2025/10/FIT-WP-38-Laukkanen-Sahari-Vehicle-Replacement-Subsidies-1.pdf
File-Format: Application/pdf
File-Function: First version, 2025
Number: 38
Classification-JEL:H23, H31, L91, R48, Q52, Q58
Keywords: vehicle replacement subsidies, climate policy, CO2 emissions, transportation emissions, policy evaluation, administrative microdata, difference-in-differences
Handle: RePEc:fit:wpaper:38