Durables and Lemons: Private Information and the Market for Cars

Arbeitspapier

We specify an equilibrium model of car ownership with private information where individuals sell and purchase new and second-hand cars over their life-cycle. Private information induces a transaction cost and distorts the market reducing the value of a car as a savings instrument. We estimate the model using data on car ownership in Denmark, linked to register data. The lemons penalty is estimated to be 18% of the price in the first year of ownership, declining with the length of ownership. It leads to large reductions in the turnover of cars and in the probability of downgrading at job loss.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CEBI Working Paper Series ; No. 07/19

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Intertemporal Household Choice; Life Cycle Models and Saving ; Asymmetric and Private Information; Mechanism Design ; Macroeconomics: Consumption; Saving; Wealth
• Thema: Lemons penalty ; car market ; estimated life-cycle equilibrium model

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Blundell, Richard ; Gu, Ran ; Leth-Petersen, Søren ; Low, Hamish ; Meghir, Costas
• Ereignis: Veröffentlichung
• (wer): University of Copenhagen, Department of Economics, Center for Economic Behavior and Inequality (CEBI)
• (wo): Copenhagen
• (wann): 2019

Weitere Informationen

• Handle: http://hdl.handle.net/10419/258907
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ