Consumption Effects of Scrapping Schemes : Worldwide Scrappage Schemes with a Special Focus on Consumption in Germany

The automotive industry has been hit hard by the financial crisis of 2007 and the subsequent economic slump. During this difficult time, in addition to other stimulus measures, almost every automobile-producing nation started a special program to support the automotive industry. In the case of Germany, the government spent 5 billion Euros on a car replacement scheme called "Abwrackprämie" in 2009. Considering this background, the focus in this work is on analyzing household consumption spending reactions to the German car scrappage scheme by comparing subsidized and non-subsidized car buyers.