The Impact of Environmental Fraud on the Used Car Market: Evidence from Dieselgate*

Itai Ater*, Nir S. Yoseph

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

This study explores the effects of Volkswagen’s 2015 emissions scandal (‘Dieselgate’) on the used car market in Israel. Using a difference-in-differences research design and administrative and proprietary data, we find that after Dieselgate the number of transactions involving VW-manipulated cars fell by 18%, and the resale price of these cars fell by 6%. The drop in the number of transactions was concentrated among private sellers. We discuss alternative explanations and suggest that lower willingness-to-pay and adverse selection following Dieselgate could explain our findings.

Original languageEnglish
Pages (from-to)463-491
Number of pages29
JournalJournal of Industrial Economics
Volume70
Issue number2
DOIs
StatePublished - Jun 2022

Funding

FundersFunder number
Eli Hurvitz Institute for Strategic Management
Henry Crown Institute of Business Research

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