(NDRC). Local subsidy policies are issued by provincial and city governments and could be retrieved from official documents released on government websites and unofficial online documentation sources such as news articles. The non-financial incentives such as exemption from driving restrictions and green plate policy are mostly announced separately from the subsidy programs. We collected these incentives through various sources including official government document releases, news and industry reports. The official policy documents and most news reports contain general information of the policy, amount of subsidy, eligibility conditions (e.g. vehicle attributes requirements) and the effective policy period. This allows us to match the policy directly to vehicle models over a certain time period based on the eligibility conditions.

Noticeably, the release date of the official documents is mostly later than the effective policy start date, causing subsidy issuance to be retroactive. However, in practice, consumers are supposed to have access to the post-subsidy price under the contemporaneous subsidy scheme. At the central level, according to the official document on subsidy issuance released by the four ministries, automobile manufacturers shall charge consumers the post-subsidy price for eligible vehicle purchases; the central government will finalize the settlement for subsidy issuance to auto manufacturers contingent on application approval.<sup>25</sup> According to the public announcements made by the MIIT about subsidy settlement with auto manufacturers in 2018, settlement issuance approval rate is about 94%.<sup>26</sup> Local subsidy issuance and settlement follow similar procedures, in which the consumers pay the post-subsidy price and auto manufacturers apply for reimbursement to local government.<sup>27</sup> Hence, it is fair to assume that despite of the retroactive policy announcements, consumers are still eligible for the appropriate subsidy per the policy implementation mandate. In order to better characterize the issuance of subsidy at different policy phases, we make an assumption on consumers’ expectation for policy availability contingent on existing local subsidy programs: if a province or a city had subsidy program in the previous time period, consumers would anticipate the continuation of the subsidy issuance (could

> 25The official documents for 2013-2015 and 2016-2020 both stated that the subsidies should target consumers directly, and consumers are eligible to pay the post-subsidy price. In the policy document for 2013-2015, the government issues quarterly advance payment to manufacturers and conducts final settlement annually. In the policy document for 2016-2020, both the advance payment and settlement are conducted annually. Sources: `http://www.gov.cn/zwgk/2013-09/17/content_2490108.htm` and `http://fgk.mof.gov.cn/law/ getOneLawInfoAction.do?law_id=83837`

> 26The MIIT publishes the announcement on subsidy settlement by region-firm-vehicle model and shows the number of applications versus application approval. Approval rate is calculated using the data provided in the policy document appendix. The 2018 settlement was published in November 2019. Source: `http: //www.miit.gov.cn/n1146295/n7281310/c7548610/content.html`

> 27Nevertheless, since local subsidy issuance is not uniformly administered as central subsidy, more delays in settlement are observed in practice. Source: `http://www.nengyuanjie.net/article/25080.html`

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