Articlediamond2008

THE DYNAMICS OF CAR AVAILABILITY IN EU COUNTRIES

Joyce Dargay · Laurent Hivert · Diègo Legros

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Transportation Planning and Optimization Economic and Environmental Valuation Energy, Environment, and Transportation Policies

Abstract

This paper investigates the dynamics of car availability in EU countries. Of particular interest is the relative contribution of state dependence, heterogeneity and serial correlation. A dynamic probit model with unobservable heterogeneity is estimated using eight (1994–2001) waves of European Community Household Panel surveys. Car availability is expressed as a function of income and a number of social-demographic factors. The dynamic probit model is estimated using simulated maximum likelihood (MSL) estimation, to overcome the computational difficulties inherent in maximum likelihood estimation of models with nontrivial error structures. The results indicate that car availability is characterized by significant state dependence, unobserved heterogeneity and negative serial correlation in the error component.

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References

2003Analysis of Panel Data 2005Simple solutions to the initial conditions problem in dynamic, nonlinear panel data models with unobserved heterogeneity 1994A Computationally Practical Simulation Estimator for Panel Data 1999State Dependence, Serial Correlation and Heterogeneity in Intertemporal Labor Force Participation of Married Women 1981Asset Holdings and the Life Cycle 1997Precautionary Savings—A Panel Study 1978Simple Statistical Models for Discrete Panel Data Developed and Applied to Test the Hypothesis of True State Dependence against the Hypothesis of Spurious State Dependence 1981Studies in Labor Markets

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