Attribute substitution in household vehicle portfolios
Name
HHPortfolio_Main.pdf
Description
Accepted version
Size
1.2 MB
Format
Adobe PDF
Checksum (MD5)
b9696c58f58673eafbce4c50e06c9ebb
Author(s)
Archsmith, James
Gillingham, Kenneth T.
Knittel, Christopher Roland
Rapson, David S.
Date Issued
December 2020
Journal
RAND Journal of Economics
Publisher
Wiley
Citation
Archsmith, James et al. "Attribute substitution in household vehicle portfolios." RAND Journal of Economics 51, 4 (December 2020): 1162-1196 © 2020 The RAND Corporation
Version
Author's final manuscript
Abstract
Roughly three quarters of vehicles are purchased into multi-car households. We study whether households are willing to substitute attributes, such as fuel economy, across vehicles within their portfolio. We develop a novel strategy to separately identify idiosyncratic preferences for an attribute from these within-portfolio effects. Using the universe of household vehicle registration records in California over a 6-year period, we find that two-car households exhibit strong substitution across vehicles when faced with an exogenous change to fuel intensity of a kept vehicle. This effect can erode a substantial portion of the benefit from major policies, such as Cash-for-Clunkers.
MIT Department
Sloan School of Management
Terms of Use
Creative Commons Attribution-Noncommercial-Share Alike
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1111/1756-2171.12353
