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A Family Hitch : Econometrics of the New and the Used Car Markets

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  • Sylvain Prado
Abstract
Everybody knows that the new cars of today are used cars of tomorrow and some people assume a competition between new and used markets. There are numerous, preconceived ideas and academic theories regarding the interactions between primary and secondary markets. To investigate the relations, we provide a macroeconomic analysis of the French, the British and the US car markets. We aim at answering the following questions. What are the interactions between the new and the second-hand car markets? Can we use the interactions to estimate the car prices of tomorrow? Our results indicate that the relations appear limited for France and the UK, whereas the US market faces a Scitoscky mechanism. Furthermore, they illustrate that the interrelations are not strong enough to fully explain and forecast market patterns.

Suggested Citation

  • Sylvain Prado, 2010. "A Family Hitch : Econometrics of the New and the Used Car Markets," EconomiX Working Papers 2010-4, University of Paris Nanterre, EconomiX.
    • Handle: RePEc:drm:wpaper:2010-4
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    References listed on IDEAS

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    1. Sylvain Prado, 2009. "Hedging residual value risk using derivatives," EconomiX Working Papers 2009-31, University of Paris Nanterre, EconomiX.
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    1. Sylvain M. Prado, 2010. "Macroeconomics of the New and the Used Car Markets," Economics Bulletin, AccessEcon, vol. 30(3), pages 1862-1884.

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    More about this item

    Keywords

    second-hand market; automotive market; prices; causality; cyclical correlations; VAR.;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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