Reasons for not Buying a Car: A Probit-selection Multinomial Logit Choice Model

AbstractTo better understand the reasons why households have no intention to buy a car, a sample of 980 respondents, living in Xian, China was asked to specify the reasons why they do not wish buy a car. A probit model was estimated to identify households who did not have the intention to buy a car, based on their socio-demographic profile and living conditions. Because only these respondents could give the reasons why they do not wish to buy a car, this selection model was linked with a multinomial logit model to estimate the probability that a particular reason for not buying a car mentioned. Results indicate that socio-demographic variables, type and size of the house and non-availability of parking space have significant effects on car purchase decisions. Main reasons for not buying a car are related to costs considerations, parking difficulties and congestion