A duration model of automobile ownership

Recent microeconomic models of automobile ownership have recognized that a household does not adjust its car holdings instantaneously when preferences or circumstances change because of adjustment costs. This paper focuses on the issues of how long it takes households to adjust. Statistical models known as duration or hazard models are used to estimate the distribution of automobile ownership lengths and to estimate the effects of characteristics of the car and household and macroeconomic variables on ownership length. The data set used in this paper includes monthly observations on vehicles owned over a period of up to years for a sample of almost 7500 households.