Univariate Time-Series Analysis of Second-Hand Car Importation in Zambia

Stanley Jere,Bornwell Kasense,Bwalya Bupe Bwalya

doi:10.4236/ojs.2017.74050

Abstract

Zambia largely depends on the international second-hand car (SHC) market for their motor vehicle supply. The importation of Second hand Cars in Zambia presents a time series problem. The data used in this paper is monthly data on SHC importation from 1st January, 2014 to 31st December, 2016. Data was analyzed using Exponential Smoothing (ES) and Autoregressive Integrated Moving Average (ARIMA) models. The results showed that ARIMA (2, 1, 2) was the best fit for the SHC importation since its errors were smaller than those of the SES, DES and TES. The four error measures used were Root-mean-square error (RMSE), Mean absolute error (MAE), Mean percentage error (MPE) and Mean absolute percentage error (MAPE). The forecasts were also produced using the ARIMA (2, 1, 2) model for the next 18 months from January 2017. Although there is percentage increase of 90.6% from November 2015 to December 2016, the SHC importation generally is on the decrease in Zambia with percentage change of 59.5% from January 2014 to December 2016. The forecasts also show a gradual percentage decrease of 1.12% by June 2018. These results are more useful to policy and decision makers of Government departments such as Zambia Revenue Authority (ZRA) and Road Development Agency (RDA) in a bid to plan and execute their duties effectively.

Highlights

Over the last two decades private vehicle ownership in the developing countries has increased at an unprecedented pace
Zambia largely depends on the international second-hand car (SHC) market for their motor vehicle supply
The results showed that Autoregressive Integrated Moving Average (ARIMA) (2, 1, 2) was the best fit for the SHC importation since its errors were smaller than those of the Simple Exponential Smoothing (SES), Double Exponential Smoothing (DES) and Triple Exponential Smoothing (TES)

Summary

Introduction

Over the last two decades private vehicle ownership in the developing countries has increased at an unprecedented pace. The economic reality of Zambia is that the majority of the population is middle class and middle income earners. This economic reality has forced Zambians to depend on the second-hand market for their motor vehicle supply. The car purchasing pattern in most developing countries has been high due to a rapid increase in ICT usage-Internet and mobile penetration, rising GDP and an emerging middle-class society [4]

Methods

Results

Discussion

Conclusion