Abstract
This study explores the effects of Volkswagen’s 2015 emissions scandal (‘Dieselgate’) on the used car market in Israel. Using a difference‐in‐differences research design and administrative and proprietary data, we find that after Dieselgate the number of transactions involving VW‐manipulated cars fell by 18%, and the resale price of these cars fell by 6%. The drop in the number of transactions was concentrated among private sellers. We discuss alternative explanations and suggest that lower willingness‐to‐pay and adverse selection following Dieselgate could explain our findings.
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