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The Effect of Car Sharing on Car Sales

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Document pages: 50 pages

Abstract: Free-Floating Car Sharing is a potential substitute to private car ownership. Using an original administrative dataset on car registrations, the staggered rollout pattern of the novel service in German cities is exploited with a difference-in-difference methodology to estimate the impact of Free-Floating Car Sharing on new car sales. One car sharing vehicle is found to reduce annual new car sales by between 2 and 4.5. This result is driven by a reduction in sales of small, compact and medium-sized models. There are two providers of Free-Floating Car Sharing in Germany, both of which are owned by large automobile manufacturers. Using a triple difference approach, the paper investigates whether there are advertising effects for the car models used by the Free-Floating Car Sharing providers, which are manufactured by the respective parent companies. I find robust and economically significant evidence for an increase in market share for one of the car models.

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