New Car Sales and Used Car Stocks: A Model of the Automobile Market
New Car Sales and Used Car Stocks: A Model of the Automobile Market Author(s): James Berkovec Reviewed work(s): Source: The RAND Journal of Economics, Vol. 16, No. 2 (Summer, 1985), pp. 195-214 Published by: Wiley on behalf of RAND Corporation Stable URL: http://www.jstor.org/stable/2555410 . Accessed: 06/02/2013 23:51
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Rand Journal of Economics Vol. 16, No. 2, Summer 1985
New car sales and used car stocks: a model of the automobilemarket
James Berkovec*
This article develops a short-run general equilibrium model of the automobile market by combining a discrete choice model of consumer automobile demand with simple models of new automobile production and used vehicle scrappage. The theoretical model allows an unlimited degree of heterogeneity of both consumers and automobiles, with equilibrium defined as aggregate demand equal to supplyfor every vehicle type. Econometric estimates of the scrappage and demand functions are then used to create a simulation model of the automobile market, which is used to provideforecasts of automobile sales, stocks, and scrappage for the 1978-1990 period. 1. Introduction * Automobile market behavior is of significant interest because of the substantial impacts of
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp
.
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.
.
Wiley and RAND Corporation are collaborating with JSTOR to digitize, preserve and extend access to The RAND Journal of Economics.
http://www.jstor.org
This content downloaded on Wed, 6 Feb 2013 23:51:29 PM All use subject to JSTOR Terms and Conditions
Rand Journal of Economics Vol. 16, No. 2, Summer 1985
New car sales and used car stocks: a model of the automobilemarket
James Berkovec*
This article develops a short-run general equilibrium model of the automobile market by combining a discrete choice model of consumer automobile demand with simple models of new automobile production and used vehicle scrappage. The theoretical model allows an unlimited degree of heterogeneity of both consumers and automobiles, with equilibrium defined as aggregate demand equal to supplyfor every vehicle type. Econometric estimates of the scrappage and demand functions are then used to create a simulation model of the automobile market, which is used to provideforecasts of automobile sales, stocks, and scrappage for the 1978-1990 period. 1. Introduction * Automobile market behavior is of significant interest because of the substantial impacts of
References: BERKOVEC, "Automobile Market Equilibrium."Ph.D. Dissertation, MassachusettsInstitute of Technology, 1983. J. AND RUST, J. "A Nested Logit Model of Automobile Demand for One-Vehicle Households." Unpublished Manuscript, 1982. published Manuscript, 1981. CAMBRIDGESYSTEMATICS, INC. "Assessmentof National Use, Choice, and Future Preferencetowardthe Automobile and Other Models of Transportation." Report submitted to the National Science Foundation, 2 vols., 1979