โ Scribed by Maxim Engers; Monica Hartmann; Steven Stern
No coin nor oath required. For personal study only.
This paper investigates whether the net benefits from owning a vehicle, proxied by annual miles driven, explain the price declines observed over a vehicle's life. We first model the household decision on how much to drive each of its vehicles. Then we empirically establish that variation in household annual miles across brands explains observed price declines. Furthermore, the effect of vehicle age on annual miles decisions (and consequently on market value) depends on household characteristics and the composition of the vehicle stock owned. Copyright ยฉ 2008 John Wiley & Sons, Ltd.
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