A Dynamic Formulation for Car Ownership Modeling

A Dynamic Formulation for Car Ownership Modeling

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Article ID: iaor20164360
Volume: 50
Issue: 1
Start Page Number: 322
End Page Number: 335
Publication Date: Feb 2016
Journal: Transportation Science
Authors: , ,
Keywords: programming: dynamic, simulation, transportation: general, planning, transportation: road, demand, marketing
Abstract:

Discrete choice models are commonly used in transportation planning and modeling, but their theoretical basis and applications have been mainly developed in a static context. In this paper, we propose an estimation technique for analyzing the impact of technological changes on the dynamic of consumer demand. The proposed research presents a dynamic formulation that explicitly models market evolution and accounts for consumers’ expectations of future product characteristics. The timing of consumers’ decisions is formulated as a regenerative optimal stopping problem where the agent must decide on the optimal time of purchase. This model frame will be further improved by modeling the choice from a set of differentiated products whose characteristics randomly change over time. The framework proposed is developed and applied in the context of car ownership.

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