How long to own and how much to use a car? A dynamic discrete choice model to explain holding duration and driven mileage

Matthieu de Lapparent and Giulia Cernicchiaro

Economic Modelling, 2012, vol. 29, issue 5, 1737-1744

Abstract: We develop a dynamic discrete choice model of car holding duration and use for French households owning only one car over the 2000–2007 period. We consider income, fuel prices and cumulated mileage as stochastic state variables. It is found that accounting for forward-looking economic agents greatly improves the understanding of the underlying logic that drives such choices whenever theoretical assumptions and used data may appear as a sketchy description of a more complex reality.

Keywords: Dynamic discrete choice; Car ownership and use; Fuel price; Income (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:29:y:2012:i:5:p:1737-1744

DOI: 10.1016/j.econmod.2012.05.018

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