Forecasting automobile demand using disaggregate choice models

This paper presents a simulation model of the American automobile market. The simulation model combines a disaggregate model of household automobile number and type choice with an econometric model of used vehicle scrappage and simple models of new car supply. For fixed vehicle designs, consumer and producer interactions determine new car sales, used car scrappage and consumer vehicle holdings. The model allows automobiles to be highly differentiated and consumers to be heterogeneous. Short-run equilibrium is defined as supply equal to demand for every vehicle type during each market period. The automobile stock then evolves slowly as new vehicles are added and old vehicles are removed during each period. An empirical application of the simulation model with 12 consumer groups and 131 vehicle types is used to forecast automobile holdings. A base case scenario is run for 1978–1984 and compared with the observed market behavior during this period. Several other simulations are then run comparing different gasoline price scenarios with the base case for 1984–1990.     

Vehicle type choice under the influence of a tax reform and rising fuel prices

Differentiated vehicle taxes are considered by many a useful tool for promoting environmentally friendly vehicles. Various structures have been implemented in several countries, e.g. Ireland, France, The Czech Republic, and Denmark. In many countries the tax reforms have been followed by a steep change in new vehicle purchases toward more diesel vehicles and more fuel-efficient vehicles. The paper analyses to what extent a vehicle tax reform similar to the Danish 2007 reform may explain changes in purchasing behaviour. The paper investigates the effects of a tax reform, fuel price changes, and technological development on vehicle type choice using a mixed logit model. The model allows a simulation of the effect of car price changes that resemble those induced by the tax reform. This effect is compared to the effects of fuel price changes and technology improvements. The simulations show that the effect of the tax reform on fuel efficiency is similar to the effect of rising fuel prices while the effect of technological development is much larger. The conclusion is that while the tax reform appeared in the same year as a large increase in fuel efficiency, it seems likely that it only explains a small part of the shift in fuel efficiency that occurred and that the main driver was the technological development.     

The impacts of environmental knowledge and attitudes on vehicle ownership and use

Using responses to a knowledge–attitudes–behavior questionnaire administered in the Sacramento, California metropolitan region, the effects of environmental knowledge and environmental attitudes on the numbers and types of vehicles owned per household, annual vehicle miles traveled, and fuel consumption are assessed. The results indicate that households with pro-environmental attitudes own fewer and more fuel-efficient vehicles, drive them less, and consequently consume less fuel than do the households of respondents without pro-environmental attitudes. The households of respondents who know more about the environmental impacts of owning and using vehicles own more fuel-efficient vehicles, but environmental knowledge is not statistically significant in relation to numbers of vehicles owned, miles driven, or fuel consumption.     

Effects of providing total cost of ownership information on consumers’ intent to purchase a hybrid or plug-in electric vehicle

Energy-saving technologies have a difficult time being widely accepted in the marketplace when they have a high initial purchase price and deferred financial benefits. Consumers might not realize that, in the long-run, the financial benefits from reduced energy consumption offset much or all of the initial price premium. One strategy to address consumer misconception of this advantage is to supply information on the “total cost of ownership”, a metric which accounts for the purchase price, the cost of the fuel, and other costs over the ownership period. In this article, we investigate how providing information on five-year fuel cost savings and total cost of ownership affects the stated preferences of consumers to purchase a gasoline, conventional hybrid, plug-in hybrid, or battery electric vehicle. Through an online survey with an embedded experimental design using distinct labels, we find that respondent rankings of vehicles are unaffected by information on five-year fuel cost savings. However, adding information about total cost of ownership increases the probability that small/mid-sized car consumers express a preference to acquire a conventional hybrid, plug-in hybrid, or a battery-electric vehicle. No such effect is found for consumers of small sport utility vehicles. Our results are consistent with other findings in the behavioral economics literature and suggest that further evaluation of the effects of providing consumers with information on the total cost of vehicle ownership is warranted.     

Consumers’ willingness to pay for alternative fuel vehicles: A comparative discrete choice analysis between the US and Japan

This paper conducts a comparative discrete choice analysis to estimate consumers’ willingness to pay (WTP) for electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) on the basis of the same stated preference survey carried out in the US and Japan in 2012. We also carry out a comparative analysis across four US states. We find that on average US consumers are more sensitive to fuel cost reductions and alternative fuel station availability than are Japanese consumers. With regard to the comparative analysis across the four US states, consumers’ WTP for a fuel cost reduction in California is considerably greater than in the other three states. We use the estimates obtained in the discrete choice analysis to examine the EV/PHEV market shares under several scenarios. In a base case scenario with relatively realistic attribute levels, conventional gasoline vehicles still dominate both in the US and Japan. However, in an innovation scenario with a significant purchase price reduction, we observe a high penetration of alternative fuel vehicles both in the US and Japan. We illustrate the potential use of a discrete choice analysis for forward-looking policy analysis, with the future opportunity to compare its predictions against actual revealed choices. In this case, increased purchase price subsidies are likely to have a significant impact on the market shares of alternative fuel vehicles.     

A volatile relationship: The effect of changing gasoline prices on public support for mass transit

The determinants of public opinion toward public transit is a little-researched topic, though a better understanding of what makes consumers willing to support transit may reveal which attributes of transit consumers value most. One determinant of people’s willingness to support investments in mass transit may be the price of fuel for transit’s principal competition, the private automobile. In this paper, I examine the relationship between the cost of gasoline and stated willingness to invest public money in mass transit improvements. I hypothesize that fuel price volatility—in addition to price itself—is a determinant of support for more mass transit funding, controlling for other factors. As the price of gasoline becomes more uncertain, the public should, all else equal, support investment in mass transportation, a form of transportation that may provide some measure of protection from the price of fuel. Results suggest a strong effect of price volatility on consumers’ willingness to support transit expenditures.     

A comparative life-cycle energy and emissions analysis for intercity passenger transportation in the U.S. by aviation,intercity bus,and automobile

Intercity passenger trips constitute a significant source of energy consumption, greenhouse gas emissions, and criteria pollutant emissions. The most commonly used city-to-city modes in the United States include aircraft, intercity bus, and automobile. This study applies state-of-the-practice models to assess life-cycle fuel consumption and pollutant emissions for intercity trips via aircraft, intercity bus, and automobile. The analyses compare the fuel and emissions impacts of different travel mode scenarios for intercity trips ranging from 200 to 1600 km. Because these modes operate differently with respect to engine technology, fuel type, and vehicle capacity, the modeling techniques and modeling boundaries vary significantly across modes. For aviation systems, much of the energy and emissions are associated with auxiliary equipment activities, infrastructure power supply, and terminal activities, in addition to the vehicle operations between origin/destination. Furthermore, one should not ignore the embodied energy and initial emissions from the manufacturing of the vehicles, and the construction of airports, bus stations, highways and parking lots. Passenger loading factors and travel distances also significantly influence fuel and emissions results on a per-traveler basis. The results show intercity bus is generally the most fuel-efficient mode and produced the lowest per-passenger-trip emissions for the entire range of trip distances examined. Aviation is not a fuel-efficient mode for short trips (<500 km), primarily due to the large energy impacts associated with takeoff and landing, and to some extent from the emissions of ground support equipment associated with any trip distance. However, aviation is more energy efficient and produces less emissions per-passenger-trip than low-occupancy automobiles for trip distances longer than 700–800 km. This study will help inform policy makers and transportation system operators about how differently each intercity system perform across all activities, and provides a basis for future policies designed to encourage mode shifts by range of service. The estimation procedures used in this study can serve as a reference for future analyses of transportation scenarios.     

Fuel economy improvements for urban driving: Hybrid vs. intelligent vehicles

The quest for more fuel-efficient vehicles is being driven by the increasing price of oil. Hybrid electric powertrains have established a presence in the marketplace primarily based on the promise of fuel savings through the use of an electric motor in place of the internal combustion engine during different stages of driving. However, these fuel savings associated with hybrid vehicle operation come at the tradeoff of a significantly increased initial vehicle cost due to the increased complexity of the powertrain. On the other hand, telematics-enabled vehicles may use a relatively cheap sensor network to develop information about the traffic environment in which they are operating, and subsequently adjust their drive cycle to improve fuel economy based on this information – thereby representing ‘intelligent’ use of existing powertrain technology to reduce fuel consumption. In this paper, hybrid and intelligent technologies using different amounts of traffic flow information are compared in terms of fuel economy over common urban drive cycles. In order to develop a fair comparison between the technologies, an optimal (for urban driving) hybrid vehicle that matches the performance characteristics of the baseline intelligent vehicle is used. The fuel economy of the optimal hybrid is found to have an average of 20% improvement relative to the baseline vehicle across three different urban drive cycles. Feedforward information about traffic flow supplied by telematics capability is then used to develop alternative driving cycles firstly under the assumption there are no constraints on the intelligent vehicle’s path, and then taking into account in the presence of ‘un-intelligent’ vehicles on the road. It is observed that with telematic capability, the fuel economy improvements equal that achievable with a hybrid configuration with as little as 7 s traffic look-ahead capability, and can be as great as 33% improvement relative to the un-intelligent baseline drivetrain. As a final investigation, the two technologies are combined and the potential for using feedforward information from a sensor network with a hybrid drivetrain is discussed.     

Consumer attitudes about electric cars: Pricing analysis and policy implications

As electric vehicles (EVs) become more readily available, sales will depend on consumers’ interest and understanding. A survey of consumer attitudes on electric cars was conducted in Manitoba from late 2011 to early 2012. It utilizes two price assessment methods. The van Westendorp price sensitivity method (PSM) shows the acceptable price range for EVs to be $22,000–27,500. This range closely matches average price range for sales of conventional cars during the same period. The willingness-to-pay method reveals consumers are unwilling to pay large premiums for EVs, even when given information on future fuel savings. A consumer group with experience or exposure to EVs is somewhat different. Nearly 25% of these people are willing to pay a premium of up to $10,000. Different interpretations can be drawn from these responses, calling for further research. An apparent policy opportunity involves consumer education to enhance knowledge and facilitate EV purchase decisions. Survey results also support the hypothesis that EV rollout has focused too much on technology, and not enough on consumers.     

A structural model of the use of automobiles by households: a case study of urban Australia

Central to the development of transport energy plans are predictions of automobile use. Together with a knowledge of the fuel efficiency of the vehicle fleet, usage acts interdependently to determine the amount of fuel consumed. In this paper we develop an econometric model system at the household level which treats vehicle use, fuel cost, and vehicle fuel efficiency as functionally interdependent. The data is drawn from Wave 1 of a4‐wave panel of Sydney households. The empirical evidence provides new insights into the influences on vehicle use and sets the context for continuing research efforts.     

Short-term impact analysis of fuel price policy change on travel demand in Malaysian cities

Abstract

Malaysia is one of the few countries in the world that provides a fuel subsidy to consumers. Due to the recent economic crisis, the Malaysian Government decided to revise its fuel subsidization policy from a fixed price subsidy to a floating price subsidy dependent on global oil demand. Recognizing that the change in fuel subsidization policy can have an impact on travel behavior, this article investigates the short-term impact of the policy change on private and public transportation in the Klang Valley region of Malaysia. Spectral analyses are performed to investigate if the policy change has an impact on private vehicle travel demand, measured in terms of road traffic, and short-term travel demand elasticity with respect to fuel price is estimated. To measure the impact on the public transportation system, the demand cross-elasticity values of rail transit and buses are also estimated. It was found that traffic flow reduces with an increase in fuel price, although elasticity and cross-elasticity values obtained are low. The article finds that there is a potential mode shift from private vehicles to rail transit with increasing fuel price. It is demonstrated that reducing fuel price subsidy can be an effective travel demand management strategy to alleviate congestion.     

Exploring the relationship between vehicle safety and fuel efficiency in automotive design

Panel data analysis is used within a fixed effect model to examine the relationship between vehicle safety ratings and fuel efficiency of 45 new vehicle models sold in the US between 2002 and 2007. While conventional wisdom and most early literature suggest that lighter, more fuel efficient vehicles are less safe to their occupants, the tests show a positive relationship between vehicle safety ratings and fuel efficiencies not only within and across most size classes but also for vehicles produced by both the US and Asian automakers. We also explore the design initiatives by manufacturers to compensate for the reductions in weight/size of fuel-efficient vehicles.     

Innovative alternatives take action – Investigating determinants of alternative fuel vehicle adoption

Alternative fuel vehicles (AFVs) as environmentally friendly alternatives to conventional internal combustion engines have gained increasing attention in general public. While empirical studies have begun to explore product-specific factors that drive consumer adoption of AFVs, an integrative framework of a comprehensive set of AFV adoption factors and its theoretical foundation as well as empirical validation is still missing. By drawing on theory of innovation adoption and theory of reasoned action we show that consumers’ perceptions of AFV attributes lead to a general attitude formation towards AFV. In conjunction with consumers’ subjective and personal norm, this in turn determines AFV adoption behavior. Concerning AFV attributes, compatibility, design, and relative advantage of AFVs exhibit the strongest influence on consumers’ attitude formation toward AFV. We derive implications for future research and policy makers. The latter include suggestions on how to develop and communicate AFV in order to stimulate AFV adoption.     

Heterogeneous consumer preferences for alternative fuel cars in China

This paper models consumer preferences for alternative fuel cars and conventional, petrol fueled cars in China. It compares discrete choice model specifications where each specification reflects how consumers choose between alternative fuel cars and conventional types of cars. We find that, in China, consumers differentiate between the types of alternative fuel cars and are more likely to consider switching from petrol fuel vehicles to hybrid than to electric cars. Segmentation analysis is used to explore groups of consumers and their likelihood of adopting alternative fuel cars.     

Asymmetric responses of highway travel demand to changes in fuel price: An explanation via fuel price uncertainty

Previous research has examined asymmetric effects of fuel price uncertainty on energy demand. If we consider that energy demand is related to travel demand, the changes in fuel prices may have asymmetric effects on highway travel demand via fuel price uncertainty. In other words, when in general fuel price is steadily rising, the highway traffic volume decreases by a small percentage. On the other hand, the highway traffic volume increases by a large percentage when fuel prices are falling. We hypothesize that the uncertainty in fuel prices generates this kind of asymmetric effect on highway traffic volume in Korea. We use the Korean monthly fuel price and highway traffic volume data from 2001 to 2009, and define the intra-month (weekly) fuel price changes as monthly fuel price volatility which is a proxy for monthly fuel price uncertainty. We found that the direction of the change in fuel prices had asymmetric effects on highway travel demand and that the fuel price uncertainty led drivers to respond asymmetrically to the changes in fuel prices.     

A review of consumer preferences of and interactions with electric vehicle charging infrastructure

This paper presents a literature review of studies that investigate infrastructure needs to support the market introduction of plug-in electric vehicles (PEVs). It focuses on literature relating to consumer preferences for charging infrastructure, and how consumers interact with and use this infrastructure. This includes studies that use questionnaire surveys, interviews, modelling, GPS data from vehicles, and data from electric vehicle charging equipment. These studies indicate that the most important location for PEV charging is at home, followed by work, and then public locations. Studies have found that more effort is needed to ensure consumers have easy access to PEV charging and that charging at home, work, or public locations should not be free of cost. Research indicates that PEV charging will not impact electricity grids on the short term, however charging may need to be managed when the vehicles are deployed in greater numbers. In some areas of study the literature is not sufficiently mature to draw any conclusions from. More research is especially needed to determine how much infrastructure is needed to support the roll out of PEVs. This paper ends with policy implications and suggests avenues of future research.     

Vehicle purchasing behaviors comparison in two-stage choice perspective before and after eco-car promotion policy in Japan

This paper compares the vehicle purchasing behaviors in Japan between before and after the eco-car (environmental friendly vehicle) promotion policy implemented. Consumer behaviors are modeled as a two-stage decision process: a consideration set formation stage and a choice-making stage. In the first stage, all available vehicle types are included in the choice set, and consumers are assumed to apply a conjunctive screening rule to construct consideration sets. In the second stage, consumers only evaluate the vehicles in the consideration set and choose the one with maximum utility. The applied Hierarchical Bayes model can avoid the issue of an indifferentiable and irregular likelihood surface caused by thresholds and discontinuities, and the data augmentation and Markov-Chain Monte Carlo estimation methods make it possible to estimate two stages simultaneously using only the information about the consumers’ actual choices. The estimations indicate that the change of consumer behavior during the formation of consideration sets after the policy implemented: more people preferred compact and hybrid vehicles because of their better fuel efficiency and more competitive prices under the tax reduction policy. The results show, however, that most of consumers who purchase hybrid vehicles after the policy implemented are only including hybrid vehicles in their consideration sets, and oil price and vehicle price still play important roles in the choice-making stage for these who consider both gasoline and hybrid vehicles.     

Factors influencing the purchasing decisions of low emission cars: A study of Slovenia

This paper presents a study of customer preferences and opinions about alternative fuel vehicles. Nowadays the studies of green technologies, especially in the area of green transport, are interesting for policy makers, vehicle producers, customers and energy suppliers. Many stakeholders from public and private sector are investing a lot of effort to identify consumer behaviour for future improvements in development of their green products and strategies. This study is a modification of previously conducted research on customer behaviour on the same topic in Scotland. The survey includes almost 700 participants to identify the most important parameters of consumer behaviour related to purchase of alternative fuel vehicle. Therefore the questionnaire includes different factors, combining financial and technical aspects, environmental performance and vehicle design. Results have revealed that the most relevant factor for purchasing low emission vehicle is total vehicle price, and that the segment of potential alternative fuel vehicles buyers is much larger than we initially anticipated. Such vehicles are, surprisingly, also more attractive for the older population, according to our results.     

(Unintended) Transport impacts of an energy-environment policy: The case of CNG conversion of vehicles in Dhaka

Motor vehicles are one of the major sources of air pollution in Dhaka, the capital of Bangladesh. The government took various policies to convert the petroleum vehicles on road to run on compressed natural gas (CNG), which allows both air quality improvements and energy security benefits. One of the market friendly policies to encourage the fuel switch was to increase the price differential between CNG and petrol and diesel. This has allowed a wide-scale adoption of CNG as the fuel of choice. However, several years into the policy, there is now a widespread belief among the policymakers that the CNG conversion may have increased car ownership and car travel due to their lower running costs, resulting in more congestion and a reversal of the strategy is on the cards. It is therefore important to test the hypothesis whether CNG conversion had genuinely increased car ownership and car travel in Dhaka city. This paper presents the results of a questionnaire survey and an econometric intervention analysis to understand the impact of CNG conversion on car ownership and car travel in Dhaka. Attention is also given to disentangle the self-selection and price-induced travel effects of CNG conversion. Results show that ownership did not increase, but travel of on-road vehicles increased due to the CNG policy. However, additional congestion costs are still around one half of the health benefits brought about by the policy.     

Evolution of the household vehicle fleet: Anticipating fleet composition, PHEV adoption and GHG emissions in Austin, Texas

In today’s world of volatile fuel prices and climate concerns, there is little study on the relationship between vehicle ownership patterns and attitudes toward vehicle cost (including fuel prices and feebates) and vehicle technologies. This work provides new data on ownership decisions and owner preferences under various scenarios, coupled with calibrated models to microsimulate Austin’s personal-fleet evolution.Opinion survey results suggest that most Austinites (63%, population-corrected share) support a feebate policy to favor more fuel efficient vehicles. Top purchase criteria are price, type/class, and fuel economy. Most (56%) respondents also indicated that they would consider purchasing a Plug-in Hybrid Electric Vehicle (PHEV) if it were to cost $6000 more than its conventional, gasoline-powered counterpart. And many respond strongly to signals on the external (health and climate) costs of a vehicle’s emissions, more strongly than they respond to information on fuel cost savings.Twenty five-year simulations of Austin’s household vehicle fleet suggest that, under all scenarios modeled, Austin’s vehicle usage levels (measured in total vehicle miles traveled or VMT) are predicted to increase overall, along with average vehicle ownership levels (both per household and per capita). Under a feebate, HEVs, PHEVs and Smart Cars are estimated to represent 25% of the fleet’s VMT by simulation year 25; this scenario is predicted to raise total regional VMT slightly (just 2.32%, by simulation year 25), relative to the trend scenario, while reducing CO₂ emissions only slightly (by 5.62%, relative to trend). Doubling the trend-case gas price to $5/gallon is simulated to reduce the year-25 vehicle use levels by 24% and CO₂ emissions by 30% (relative to trend).Two- and three-vehicle households are simulated to be the highest adopters of HEVs and PHEVs across all scenarios. The combined share of vans, pickup trucks, sport utility vehicles (SUVs), and cross-over utility vehicles (CUVs) is lowest under the feebate scenario, at 35% (versus 47% in Austin’s current household fleet). Feebate-policy receipts are forecasted to exceed rebates in each simulation year.In the longer term, gas price dynamics, tax incentives, feebates and purchase prices along with new technologies, government-industry partnerships, and more accurate information on range and recharging times (which increase customer confidence in EV technologies) should have added effects on energy dependence and greenhouse gas emissions.