The Impact of Fuel Economy and Branding on Car Depreciation

Drawing on a data set containing 371,082 observations on new and used cars, this study estimates the determinants of prices in the primary and secondary car markets in Germany. The authors are specifically interested in identifying those vehicle attributes that are responsible for retaining the car’s value in the used car market. Beyond parameterizing the influence of technical features and brand name on the new car price, the model set-up simultaneously generates a corresponding set of parameter estimates for the used car price, thereby allowing the authors to formally compare their relative magnitudes across the two markets. This comparison reveals that fuel economy, in particular, is an important determinant of the price, one whose impact is higher in magnitude in the used car market than in the new car market. That fuel economy strongly influences the value of used cars is of relevance to European climate protection policy.

• Supplemental Notes:
  • This paper was sponsored by TRB committee ABE20 Transportation Economics.
• Corporate Authors:

  Transportation Research Board

  500 Fifth Street, NW
  Washington, DC  United States  20001
• Authors:
  • Kihm, Alexander
  • Vance, Colin
• Conference:
  • Transportation Research Board 94th Annual Meeting
  • Location: Washington DC, United States
  • Date: 2015-1-11 to 2015-1-15
• Date: 2015

Language

• English

Media Info

• Media Type: Digital/other
• Features: References; Tables;
• Pagination: 14p
• Monograph Title: TRB 94th Annual Meeting Compendium of Papers

Subject/Index Terms

• TRT Terms: Automobiles; Depreciation; Fuel consumption; Prices; Used vehicle industry
• Geographic Terms: Germany
• Subject Areas: Economics; Highways; Vehicles and Equipment; I10: Economics and Administration; I90: Vehicles;

Filing Info

• Accession Number: 01554435
• Record Type: Publication
• Report/Paper Numbers: 15-3334
• Files: TRIS, TRB, ATRI
• Created Date: Feb 26 2015 9:49AM