Vehicle quality gap widens between Southern and Northern Italy
Southern Italian firms hold older, less efficient vehicles, finds Bank of Italy research published on October 20, 2026. Marta Crispino, Michele Loberto and Riccardo Russo document a widening North-South capital-quality gap over 2015-2024.
Older purchases, later disposals
Working Paper 1548 tracks about 4 million vehicles and 863,362 firms over 2015-2024, measuring quality through age and adjusted CO2 emissions.
At end-2024, estimated fleet age averaged 12.7 years in the South versus 9.1 in the North.
Acquired vehicles averaged 8.9 versus 5.7 years; disposals averaged 14.8 versus 12.2 years.
The acquisition-age gap rose from 2.8 years in 2015-2016 to 3.4 in 2023-2024; the disposal gap increased from 2.0 to 3.6 years.
Firm and vehicle characteristics explain about one-third of regional quality differences.
With extensive controls, acquired vehicles remain about 30 percent older in the South and disposed vehicles 12 percent older.
Fleet age correlates with regional labor productivity at -0.87.
Used markets reinforce the divide
Used vehicles account for 65 percent of Southern acquisitions versus 52 percent in the North; new purchases represent 19 and 33 percent, respectively.
Most used trades remain within their macro-region.
Vehicles traded within the South average 10.9 years, versus 8.2 years for North-to-South flows.
Northern sellers supply 27 percent of Southern used purchases; the reverse flow represents 3 percent of Northern purchases.
These inflows partly improve Southern fleet quality.
Including leased vehicles leaves the regional pattern largely unchanged.
Quality complicates productivity accounting
The authors warn that ignoring capital quality can misattribute embodied technology gains to total factor productivity.
Their evidence is descriptive and does not establish causality or quantify effects across all assets.
They also caution that investment subsidies do not automatically ensure higher-quality capital adoption.