A Microeconomic Model of the Joint Decision on Car Ownership and Car Use

The model is explicitly based on the microeconomic theory of consumer behavior, in which the fixed and variable car costs are two main components of budget restriction. A household is assumed to maximize its utility function with two goods: annual kilometrage in the first car and other goods.

The non-linear forms of likelihood functions used in this paper are much sophisticate and realistic. In the end of this paper, micro-simulations are carried out to investigate the impact of changes in variable car costs, fixed car costs, income, and combinations of these on car ownership and use.