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Automobile replacement: a dynamic structural approach

Schiraldi, Pasquale (2011) Automobile replacement: a dynamic structural approach. RAND Journal of Economics, 42 (2). pp. 266-291. ISSN 0741-6261

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Identification Number: 10.1111/j.1756-2171.2011.00133.x

Abstract

This article specifies and estimates a structural dynamic model of consumer demand for new and used durable goods. Its primary contribution is to provide an explicit estimation procedure for transaction costs. Identification of transaction costs is achieved from the variation in the share of consumers choosing to hold a given car type each period, and from the share of consumers choosing to purchase the same car type that period. Specifically, I estimate a random-coefficient discrete-choice model that incorporates a dynamic optimal stopping problem. I apply this model to evaluate the impact of scrappage subsidies on the Italian automobile market.

Item Type: Article
Official URL: http://www.rje.org/
Additional Information: © 2011 RAND
Divisions: Economics
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
JEL classification: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods: General
C - Mathematical and Quantitative Methods > C6 - Mathematical Methods and Programming > C61 - Optimization Techniques; Programming Models; Dynamic Analysis
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance
L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L92 - Railroads and Other Surface Transportation: Autos, Buses, Trucks, and Water Carriers; Ports
Sets: Departments > Economics
Collections > Economists Online
Date Deposited: 27 Jun 2011 10:23
Last Modified: 20 Jun 2019 01:29
URI: http://eprints.lse.ac.uk/id/eprint/36893

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