Study: ‘Cash for Clunkers’ was a lemon

The 2009 “cash for clunkers” program was wildly popular, Emily Badger says at Miller-McCune, but a new study finds that it did little for environment or the economy.

In all, the federal government spent $2.85 billion on incentives to help consumers buy 678,359 new cars. The stated goal was to give the economy–particularly the auto industry–a boost while getting old gas-guzzlers off the road.

But researchers for the think tank Resources for the Future concluded that most of the consumers who took advantage of the program were going to buy a new car anyway. And the new cars they chose got only marginally better gas mileage than the vehicles they would have bought without the program.

The program might have had some economic benefits nonetheless, if consumers spent the incentive money on other goods, but overall, the researchers concluded, in trying to serve two ends–the economy and the environment–“cash for clunkers” did little good for either.