Tanner, Reto and Bolduc, Denis (2012): The Multiple Discrete-Continuous Extreme Value Model (MDCEV) with fixed costs.
Download (983kB) | Preview
In this paper, we present a model that can be viewed as an extension of the traditional Tobit model. As opposed to that specific model, ours also accounts for the the fixed costs of car ownership. That extension is needed since being carless is an option for many households in societies that have a good system of public transportation, the main reason being that carless households wish to save the fixed costs of car ownership. So far, no existing model can adequately map the impact of these fixed costs on car ownership. The Multiple Discrete-Continuous Extreme Value Model (MDCEV) with fixed costs fills this gap. In fact, this model can evaluate the effect of policies intended to influence household behaviour with respect to car ownership, which can be of great interest to policy makers. Our model makes it possible to compute the effect of policies such as taxes on fuel or on car ownership on both the share of carless households and the average driving distance. We calibrated the model using data on Swiss private households in order to forecast were then able to forecast responses to policies. One result of particular interest that cannot be produced by other models is the evaluation of the impact of a tax on car ownership. Our results show that a tax on car ownership has a much lower impact on aggregate driving demand – per unit of tax revenues – than a tax on fuel.
|Item Type:||MPRA Paper|
|Original Title:||The Multiple Discrete-Continuous Extreme Value Model (MDCEV) with fixed costs|
|English Title:||The Multiple Discrete-Continuous Extreme Value Model (MDCEV) with fixed costs|
|Keywords:||The Multiple Discrete-Continuous Extreme Value Model (MDCEV); fixed costs; fuel consumption; carbon dioxide; emissions|
|Subjects:||C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C51 - Model Construction and Estimation
D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis
C - Mathematical and Quantitative Methods > C2 - Single Equation Models; Single Variables > C24 - Truncated and Censored Models; Switching Regression Models
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q4 - Energy > Q40 - General
C - Mathematical and Quantitative Methods > C0 - General > C01 - Econometrics
|Depositing User:||Reto Tanner|
|Date Deposited:||21. Sep 2012 13:26|
|Last Modified:||15. Feb 2013 18:14|
Axhausen, Kay W. and Alexander Erath, 2010, “Long term fuel price elasticity: Effects on mobility tool ownership and residential location choice”, Bundesamt für Energie, 2010, Publikation 29015.
Bhat, Chandra R., 2005, “A multiple discrete-continuous extreme value model: formulation and application to discretionary time-use decisions”, Transportation Research Part B 39 (2005), 679-707.
Bhat, Chandra R. and Sudeshna Sen, 2006, “Household vehicle type holdings and usage: an application of the multiple discrete-continuous extreme value (MDCEV) model”, Transportation Research Part B 40 (2006) 35–53.
Bhat, Chandra R., 2008. “The multiple discrete-continuous extreme value (MDCEV) model: role of utility function parameters, identification considerations, and model extensions”, Transportation Research Part B 42 (2008) 274–303.
Bjørner, Thomas Bue, 1999, “Demand for Car Ownership and Car Use in Denmark: A Micro Econometric Model”, International Journal of Transport Economics, Vol. XXVI, No. 3, pp. 377-395.
De Jong, G. C., 1990, “An indirect utility model of car ownership and private car use”, European Economic Review, Elsevier, Vol. 34(5), 971-985, July.
Dubin, Jeffrey A. and Daniel L. McFadden, 1984, “An Econometric Analysis of Residential Electric Appliance Holdings and Consumption”, Econometrica, Vol. 52, No. 2 (Mar., 1984), 345-362.
Goodwin, P and Dargay, J and Hanly, M., 2004, “Elasticities of road traffic and fuel consumption with respect to price and income: a review”, Transport Reviews, 24 (3) , 275-292.
Graham, Daniel and Stephen Glaister, 2001, “Review of income and price elasticities of demand for road traffic”, Final Report. Centre for Transport Studies, Imperial College of Science, Technology and Medicine.
Graham, D.J. and Glaister, S., 2004, “A Review of Road Traffic Demand Elasticity Estimates, Transport Reviews”, 24 (3), 261-276.
Johansson, Olof and Lee Schipper, 1997, “Measuring the Long-Run Fuel Demand of Cars”, Journal of Transport Economics and Policy, September 1997.
Ramjerdi, F. and L. Rand, 1992, “The National Model System for Private Travel”, Institute of Transport Economics. TØI rapport 150/1992. Oslo.
Swiss Federal Statistical Office SFSO, 2009, “Konsumentenpreisindex, LIK, Durchschnittspreise für Benzin und Diesel, Monatswerte”, Swiss Federal Statistical Office SFSO, Neuenburg (Switzerland) 2009.
Swiss Federal Statistical Office SFSO, 2006, “Mikrozensus 2005 zum Verkehrsverhalten”, Swiss Federal Statistical Office SFSO, Neuenburg (Switzerland) 2006.
Swiss Federal Statistical Office SFSO, 2006, “Mikrozensus 2005 zum Verkehrsverhalten, Kurzversion Fragebogen (Hauptbefragung)”, Swiss Federal Statistical Office SFSO, Neuenburg (Switzerland) 2006.
Touring Club der Schweiz (TCS), 2007, “Kosten eines Musterautos”.