Forecasting Adoption of Ultra-Low-Emission Vehicles Using the GHK Simulator and Bayes Estimates of a Multinomial Probit Model

32 Pages Posted: 1 Mar 2012

See all articles by Ricardo Daziano

Ricardo Daziano

Cornell University

Martin Achtnicht

Leibniz Institute of Urban and Regional Development; ZEW – Leibniz Centre for European Economic Research

Date Written: February 29, 2012

Abstract

In this paper we use Bayes estimates of a multinomial probit model with fully flexible substitution patterns to forecast consumer response to ultra-low-emission vehicles. In this empirical application of the probit Gibbs sampler, we use stated-preference data on vehicle choice from a Germany-wide survey of potential light-duty-vehicle buyers using computer-assisted personal interviewing. We show that Bayesian estimation of a multinomial probit model with a full covariance matrix is feasible for this medium-scale problem. Using the posterior distribution of the parameters of the vehicle choice model as well as the GHK simulator we derive the choice probabilities of the different alternatives. We first show that the Bayes point estimates of the market shares reproduce the observed values. Then, we define a base scenario of vehicle attributes that aims at representing an average of the current vehicle choice situation in Germany. Consumer response to qualitative changes in the base scenario is subsequently studied. In particular, we analyze the effect of increasing the network of service stations for charging electric vehicles as well as for refueling hydrogen. The result is the posterior distribution of the choice probabilities that represent adoption of the energy-efficient technologies.

Keywords: Discrete choice models, Bayesian econometrics, Low emission vehicles, Charging infrastructure

JEL Classification: C25, D12, Q42

Suggested Citation

Daziano, Ricardo and Achtnicht, Martin, Forecasting Adoption of Ultra-Low-Emission Vehicles Using the GHK Simulator and Bayes Estimates of a Multinomial Probit Model (February 29, 2012). ZEW - Centre for European Economic Research Discussion Paper No. 12-017, Available at SSRN: https://ssrn.com/abstract=2013279 or http://dx.doi.org/10.2139/ssrn.2013279

Ricardo Daziano

Cornell University ( email )

Ithaca, NY 14853
United States

Martin Achtnicht (Contact Author)

Leibniz Institute of Urban and Regional Development ( email )

Weberplatz 1
Dresden, 01217
Germany

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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