This objective of this research is to develop a dynamic econometric model that accounts for the evolving characteristics of the products offered by the automobile industry and consumers? expectations of future vehicle quality. The timing of consumers? purchases is formalized as an optimal stopping problem where the agent (consumer) must decide on the optimal time of purchase. The modeling framework is further enriched by explicitly considering the consumer?s choice from a set of different types of vehicles whose quality changes stochastically over time. The consideration of heterogeneity in parameters and the possibility of repeated purchases are part of the proposed dynamic model. The project also intends to solve the difficulties encountered when dealing with the estimation of complex econometric models. In particular, concepts derived from stocastic programming and advanced optimization techniques based on trust regions will be adopted to formalize and solve this dynamic problem.
If successful, this research will contribute to the major challenges facing society when attempting to meet its increasing mobility needs while striving to minimize energy consumption and reduce environmental and economic impacts. More energy efficient and environmentally friendly highway transportation technologies are under development and could be available on the market in the near future; they could ensure the freedom of mobility and energy security, while lowering costs and reducing the impact on the environment. Estimation techniques for analyzing the impact of technological improvements and rapid changes in energy costs are necessary to understand the mobility of tomorrow and adapt the products of our car industry.Students will be actively involved in collaboration with four international centers recognized for their excellence in education and research. The creation of an integrative, inter-disciplinary curriculum at the University of Maryland is expected to raise the awareness and the interests of both undergraduate and graduate students in transportation and related disciplines.