Combined Vehicle Type and Fuel Type Choices of Private Households: An Empirical Analysis for Germany

Abstract

This paper examines joint consumer purchasing decisions of vehicle type and fuel type based on a data-set from a Germany-wide survey among 1500 potential car buyers. The goal is to study the buyer segments that are considering to purchase the different types of vehicles and to identify the main determinants influencing the joint choice decision: socio-demographic and household characteristics, attitudes and preferences, as well as vehicle-related attributes. Based on a nested logit model, our results suggest that although German car buyers’ are very heterogeneous regarding their preferences, several similarities are found between buyers of specific vehicle types (10 vehicle classes) and specific fuel types (gasoline, diesel, alternative fuel), e.g. smaller cars and alternative fuel vehicles (AFVs) have commonalities regarding individual’s environmental awareness/behavior and fuel consumption/costs. Policy-makers, when tailoring their policies, can benefit from making use of the specific insights gained from this particularly comprehensive study, and the comparisons made with the German and international scientific literature on the topic. For instance, the similarities between buyers preferring specific fuel types and specific vehicle types can be used for tailorized measures to incentivize individuals’ vehicle type shifting (e.g from larger to smaller vehicles), fuel type switching (e.g. from fossil-fuelled vehicles to AFVs), or both.

Keywords: Discrete Choice, Revealed Preferences, Stated Intentions, Nested Logit Model, Alternative Fuel Vehicles, Vehicle Segments

JEL Classification: C35, C38, D12, M38, R48