"Cash for Corollas: When Stimulus Reduces Spending"

By Mark Hoekstra, Steven L. Puller, and Jeremy West, American Economic Review, July 2017. Abstract:

The 2009 Cash for Clunkers program aimed to stimulate consumer spending in the new automobile industry, which experienced disproportionate reductions in demand and employment during the Great Recession. Exploiting program eligibility criteria in a regression discontinuity design, we show more than half of the subsidies went to households who would have purchased during the two-month program anyway; the rest accelerated sales by no more than eight months. Moreover, the program’s fuel efficiency restrictions shifted purchases toward vehicles that cost on average $7,600 less. Thus, we estimate on net the $3 billion program reduced total new vehicle spending by $5 billion.

A summary is freely available here.

"A Great Time to Buy Used . . . But Not Because They’re Cheap"

By Eric Peters, Car Guy:

The car companies have had to resort to design and engineering measures just as desperate and extreme as the financial measures to which they are resorting to fluff up sales. But in the case of the design and engineering measures, it is to placate federal regulatory ayatollahs, who continue to demand, among other things, that new vehicles achieve ever-higher fuel economy — and lower “greenhouse emissions” — irrespective of the cost involved.

"Government is the name we give to the money we waste together."