Automobile Loss Rates and the Expected Capital Cost of Vehicles: An Empirical Note

David Hensher

The Economic Record, 1987, vol. 63, issue 3, 247-254

Abstract: Knowledge of the market loss rate of vehicles is necessary for the determination of the expected capital cost of vehicles, a major influence on vehicle demand. It is also required in its own right for predicting the availability of specific vehicles of known vintage at future dates. We draw on the existing literature on vehicle scrappage and its links with future vehicle prices to provide a simple framework for determining the loss rates and relevant capital costs of the stock of vehicles available in 1982 in the Sydney metropolitan area. The empirical evidence shows that vehicle prices haw an influence on vehicle life expectancy. and that technical deterioration alone is an inappropriate basis for loss rate determination.

Date: 1987
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https://doi.org/10.1111/j.1475-4932.1987.tb00655.x

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