Models for Equilibrium Trade in Automobile Markets

In this lecture we discuss how to, compute equilibria and structurally estimate dynamic equilibrium models in market for durable assets. We will mainly discuss the results in Gillingham et al(WP, 2020) with a strong focus on the details of how to compute a stationary equilibrium in a "simple" toy model for the used car market.

We will briefly consider a large scale life cycle version of a model for the Danish market for automobiles. We estimate the model using full-population Danish register data on car ownership, driving and demographics for the period 1996–2009, covering all Danish households and cars.

Beyond that I have added a link to an excellent lecture given by Michael Keane at the Becker Friedman Institute a few years ago. Here Mike talks about the practical aspects of structural estimation that you will encounter when doing structural empirical work.

Michael Keane, a seasoned practitioner and leading figure in the field of computational economics and structural econometrics, and in this video includes many important insights about "The Art of Structural Econometrics".

If you feel overloaded with material. I recommend Mikes lecture over mine. His advice on how tis structure your work will be extremely useful when you start working own your term papers.

Preparation:

Gillingham et al(WP, 2020): "EQUILIBRIUM TRADE IN AUTOMOBILES"

Material:

Slides_part1
Gillingham et al(WP, 2015): "A Dynamic Model of Vehicle Ownership, Type Choice, and Usage"
Code for solving equilibrium model for the used car model (a stripped down version of the "The Toy Model")

Online lecture

The art of structural estimation by Michael Keane

Lecture 15 (Zurcher on Steroids II): Equilibrium Trade in Automobile Markets