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An Economic Model of Australian Passenger Automobile Demand: A segmented Markets Approach

Author

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  • Madden, G.G.

    (University of Tasmania, Hobart)

Abstract

This paper estimates a set of equations explaining the demand for passenger automobiles in Australia for small, medium and luxury size vehicles for the period 1973(1) through 1982(4). These equations are useful because they enable the examinations of hypotheses concerned with changing demand compositions. Model results support the hypothesis that small cars gained in popularity over the period as a second car, while the demand for medium size vehicles fell because of the poor relative fuel efficiency of the class. In addition this paper suggests that an undesirable side effect of government petrol parity pricing policy has been to substantially depress automobile demand in all size classes.

Suggested Citation

  • Madden, G.G., 1988. "An Economic Model of Australian Passenger Automobile Demand: A segmented Markets Approach," Economic Analysis and Policy, Elsevier, vol. 18(1), pages 53-69.
    • Handle: RePEc:eee:ecanpo:v:18:y:1988:i:1:p:53-69
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