STICERD Industrial Organisation Seminars
Household Diversification: The Vehicle Portfolio Effect
Dave Rapson (University of California, Davis), joint with James Archsmith, Kenneth Gillingham, Christopher Knittel
Monday 20 March 2017 12:30 - 14:00
Many of our seminars and public events this year will continue as in person or as hybrid (online and in person) events. Please check our website listings and Twitter feed @STICERD_LSE for updates.
Unless otherwise specified, in-person seminars are open to the public.
Those unable to join the seminars in-person are welcome to participate via zoom if the event is hybrid.
About this event
Households value diversity in many settings, including financial assets, gender of children, and occupations. This paper quantifies the extent to which multi-car households exhibit preferences for a diversified vehicle portfolio. We deploy a novel identification strategy to examine how an exogenous change in the fuel economy of a kept vehicle affects a household's choice of a second vehicle purchased and find strong preferences for a diverse portfolio in fuel economy. We further find that this effect operates via car attributes that are correlated with fuel economy, including vehicle footprint and weight. This new evidence suggests that the portfolio effect exerts a strong force that may erode a substantial portion of the expected future gasoline savings from fuel economy standards, particularly those that are attribute-based.
Industrial Organisation seminars are held on Mondays in term time at 12:30-14:00, ONLINE, unless specified otherwise.
Seminar organiser: Alessandro Gavazza.
For further information please contact Lubala Chibwe, either by email: email@example.com.
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