City Research Online

Abstract

The Volkswagen emissions scandal began in 2015, when the U.S. Environmental Protection Agency (EPA) announced that diesel cars produced by Volkswagen from 2009 through 2015 were in violation of emissions standards. We analyse the impact of this announcement on transaction prices for Volkswagen cars on the U.S. eBay Motors. The main focus is on Volkswagen cars other than the 2009-2015 diesel models, namely, vehicles that did not violate EPA standards, allowing us to assess whether the negative shock received by the emissions standards violators spilled over to other Volkswagen models that were in compliance. Our difference-in-differences results show that final bid prices declined after the announcement by 14% for non-violating diesel cars and 9% for non-violating gasoline cars. Our analysis also provides little evidence of considerable changes in the numbers of participating bidders, bidding strategies, numbers of listings, and reserve-price strategies, suggesting that the drops in prices likely resulted from lowered willingness to pay from buyers.

Publication Type:	Article
Additional Information:	This article has been accepted for publication in Journal of Marketing Research by SAGE. All rights reserved.
Publisher Keywords:	Volkswagen emissions scandal, eBay auctions, spillover effects
Subjects:	G Geography. Anthropology. Recreation > GE Environmental Sciences H Social Sciences > HB Economic Theory T Technology > T Technology (General)
Departments:	School of Policy & Global Affairs > Economics
SWORD Depositor:	Symplectic Administrator

Export

Downloads