We are fortunate to have on-campus access to The Economists’ Voice . These are short, generally readable pieces by some well-known economists.
This week we get an analysis of the cash for clunkers huzzah. It is a nice example of a benefit-cost analysis that monetizes non-market amenities. Those with interest in environmental economics, take notice (you’ll be seeing this again).
Is CARS a Clunker?
Burton A. Abrams, University of Delaware
George R. Parsons, University of Delaware
Summary: Burton Abrams and George Parsons of the University of Delaware evaluate the efficiency of the recently introduced ‘Cash for Clunkers’ program and conclude that the cost exceeds the benefit by approximately $2000 per vehicle.
Did they say $2000 per vehicle? Couldn’t be!
Take a look at the archives. It’s ripe with good reading.