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

45 Pages Posted: 1 May 2018

See all articles by Itai Ater

Itai Ater

Tel Aviv University - Coller School of Management

nir yosef

Tel Aviv University

Date Written: April 2018

Abstract

This study explores how exposure of fraud committed by a durable-goods manufacturer affects secondary markets for that manufacturer's products. Specifically, we examine the effect of Volkswagen's 2015 emissions scandal ("Dieselgate") on the used car market in Israel. Using a difference-inĂ¢??differences research design and administrative and proprietary data, we find that, after Dieselgate, the number of transactions involving VW-mishandled 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 reputational concerns and adverse selection following Dieselgate could explain our findings.

JEL Classification: D12, D80, L14, L62

Suggested Citation

Ater, Itai and yosef, nir, The Impact of Environmental Fraud on the Used Car Market: Evidence from Dieselgate (April 2018). CEPR Discussion Paper No. DP12899, Available at SSRN: https://ssrn.com/abstract=3171167

Itai Ater (Contact Author)

Tel Aviv University - Coller School of Management ( email )

Tel Aviv
Israel

Nir Yosef

Tel Aviv University

Ramat Aviv
Tel-Aviv, 6997801
Israel

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
0
Abstract Views
790
PlumX Metrics