A forecast of household ownership and use of alternative fuel vehicles: A multiple discrete-continuous choice approach

Abstract

The paper analyzes how adding alternative fuel passenger cars to the market will affect patterns in demand for passenger cars. We use conjoint analysis and a multiple discrete-continuous choice model to estimate consumer preferences regarding alternative fuel vehicles, and based on the estimates we conduct a simulation to analyze changing rates of ownership and use of variously fueled passenger cars under the effect of the introduction of alternative fuel passenger cars. In addition, we estimate changes in overall fuel consumption and the emission of pollutants. The results show that gasoline-fueled cars will still be most consumers' first choice, but alternative fuel passenger cars will nevertheless compete and offer a substitute for the purchase and use of gasoline-fueled or diesel-fueled cars. Finally, results show that adding alternative fuel cars to the market would effectively lower gasoline and diesel fuel consumption and the emission of pollutants.