Monday, June 24, 2019

“Automobile Depreciation: Estimates and Implications”
James Sallee (University of California, Berkeley)
Joint with Christopher Knittel (Massachusetts Institute of Technology)


Automobiles depreciate with both age and mileage—a car loses market value as you drive it more, but it also loses value over time if you keep it locked in your garage. The relative importance of age and mileage to depreciation matters for a range of issues in transportation and energy economics. This paper uses data on used vehicle prices and vehicle survival to estimate how vehicle depreciation depends on age and mileage. We then use these estimates to calculate the economic value of transportation network companies as they pertain to capital depreciation, to estimate the scale of a rebound effect implied by these changes, and to comment on existing literature in energy policy.

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