Keywords: Consumer, automobile, leasing
Abstract: This paper presents a model of consumer automobile replacement in
the presence of leasing. The model incorporates credit constraints to
distinguish between the leasing and purchasing options. It demonstrates
how leasing increases the probability that a household replaces its
automobile and how households that lease choose higher quality automobiles.
The qualitative choice model of the household's decision to lease
provides support for the observation that households that lease face credit
constraints. It also shows that although households that lease new
automobiles are quite similar to those that purchase, they exhibit differences
consistent with the theory. In particular, they prefer newer, more expensive
Full paper (139 KB PDF)
| Full paper (821 KB Postscript)
Home | FEDS | List of 1999 FEDS papers
To comment on this site, please fill out our feedback form.
Last update: February 10, 2000