Demand for new passenger cars and pick-ups in Kenya an empirical study
Abstract
The automobile industy is an important sector in many
modern economies. In Kenya, the government's policy on this
industry has been characterized by various inconsistencies.
This study sought to identify the determinants of demand for
automobiles in Kenya, their statistical significance and policy
implications.
The parameters in the model were estimated using time series
data for the period 1970-86. The demand for cars was found to be
determined by the stock of cars' own price, personal income and
government policy. These findings show that fiscal and monetary
policies do affect the demand for cars considerably. The demand
for pick-ups was found to be determined by national income and
stock of pick-ups; this contradicts the general belief that price
is the major determinant of demand lor commercial vehicles. The
government therefore could rationalize the operations of the
sector through fiscal policies without undermining the economy
Sponsorhip
The University of NairobiPublisher
Department of Economics