Determinants of Demand for Automobiles in Brazil: An Econometric Analysis in the Period 2012-2017

Pedro Vartanian and Paulo Henrique Silva de Oliveira

International Journal of Economics and Finance, 2020, vol. 12, issue 7, 1

Abstract: This paper aims to investigate the determinants of demand for automobiles in Brazil in the period 2012-2017. To this end, the research initially contemplates a historical approach that shows that the sector developed, at first, guided by the State and, subsequently, in a race by foreign automakers to build the respective production plants, until it became one of the main sectors of the Brazilian economy, whose performance directly reflects the behavior of all national production. The second step was to model the contemporary behavior of the sector, where it can be seen that some variables, such as income, price, interest rate, IPI rates, and seasonality, have relevant statistical significance and can be used to interpret demand and make forecasts about the future of the sector. An econometric estimate based on ordinary least squares with a dummy variable was used. Among the results found, the importance of the income and price effects as important determinants of demand for automobiles in Brazil in the analyzed period stands out.

Date: 2020
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