DETERMINANTS OF PARTICIPATION IN ACCELERATED VEHICLE-RETIREMENT PROGRAMS

Accelerated vehicle-retirement programs are currently being examined a s one way to reduce hydrocarbon emissions. Forecasting participation r ates in these programs is one of the major areas of uncertainty becaus e the number of participants and their characteristics are likely to v ary with the price offered to attract old cars. We present a theoretic al model of the owner's car tenure and scrappage decision. Next, we de velop and estimate an econometric model of participation in an old-veh icle scrap program using data from a recent program in the state of De laware. We then predict participation rates at different possible offe r prices.