2026-09-20T05:00:44Zhttps://dspace.mit.edu/server/oai/requestoai:dspace.mit.edu:1721.1/1156502021-07-05T14:03:20Zcom_1721.1_7582com_1721.1_7581col_1721.1_131023
Jonathan Parker.
Lu, Fangzhou. Ph. D. Sloan School of Management
Sloan School of Management.
Sloan School of Management
2018-05-23T16:28:41Z
2018-05-23T16:28:41Z
2018
2018
http://hdl.handle.net/1721.1/115650
1036985305
Thesis: S.M. in Management Research, Massachusetts Institute of Technology, Sloan School of Management, 2018.
Cataloged from PDF version of thesis.
Includes bibliographical references (pages 27-28).
This paper evaluate the influence of household heterogeneity on their decisions to take up the vehicle scrappage program (VSP) in China. The presence of debt owed to family and friends (DOFF) on household balance sheet significantly reduces the takeup rate of the cash for clunkers program in China, by approximately 1.57%. Moreover, this effect is stronger among households without a schedule for DOFF repayment, a formal debt contract, or positive interest rate. This suggests that informal finance can have shadow cost due to informal debt's potential recall risk, and non-pecuniary costs in the forms of social sanction. Moreover, I exploit a unique rebate mechanism of the VSP in China to show that the program design and household liquidity together play a big role in determining the take-up rate of the vehicle scrappage program.
by Fangzhou Lu.
S.M. in Management Research
47 pages
eng
Massachusetts Institute of Technology
MIT theses are protected by copyright. They may be viewed, downloaded, or printed from this source but further reproduction or distribution in any format is prohibited without written permission.
http://dspace.mit.edu/handle/1721.1/7582
Sloan School of Management.
Informal debt contract and consumption : evidence from the vehicle scrappage program/
Thesis
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<Abstract>This paper evaluate the influence of household heterogeneity on their decisions to take up the vehicle scrappage program (VSP) in China. The presence of debt owed to family and friends (DOFF) on household balance sheet significantly reduces the takeup rate of the cash for clunkers program in China, by approximately 1.57%. Moreover, this effect is stronger among households without a schedule for DOFF repayment, a formal debt contract, or positive interest rate. This suggests that informal finance can have shadow cost due to informal debt's potential recall risk, and non-pecuniary costs in the forms of social sanction. Moreover, I exploit a unique rebate mechanism of the VSP in China to show that the program design and household liquidity together play a big role in determining the take-up rate of the vehicle scrappage program.</Abstract>
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