Accounting for expectations about the future: a dynamic discrete-continuous choice model (DDCCM) of car ownership, usage and fuel type

Car ownership and usage can vary importantly across years due to various factors, such as the introduction of new governmental policies, changes in the available technologies or variations of the market features. In order to explain and predict these changes, appropriate demand models are needed. Cars are durable goods and households account for that aspect when making an acquisition. In this research we present a dynamic discrete-continuous choice model (DDCCM) of car ownership, usage and fuel type in Sweden, where we account for households? expectations about the future utilities of their choices. In a dynamic setting, we precisely model simultaneously the transaction type, the choice of fuel type, the ownership status (private versus company car), the choice of car state new versus second-hand) and the annual driving distance. Such choices are modeled at the household level and for up to two cars in the household.