Automobile Demand and the Policy Forecast

Mathematical models of the automotive system play a valuable role in forecasting and policy analysis, especially in the public sector. However, poor documentation, lack of adequate model evaluation and unfamiliarity with the data and structural limitations of models suggest the possibility of misuse in such policy applications as fuel economy standards and regulatory impact assessments. Findings are illustrated by analysis of two models: the Wharton EFA Automobile Demand Model and the Sweeney Passenger Car Gasoline Demand Model. In addition, 40 world sector models and studies representing more than 75 countries are summarized.