History v. Simulation: An Analysis of the Drivers of Alternative Energy Vehicle Sales
Simulations of the US light duty vehicle stock help policy makers, investors, and auto manufacturers make informed decisions to influence the future of the stock and its associated green house gas emissions. Such simulations require an underlying framework that captures the key elements of consumer purchasing decisions, which can be uncertain. This uncertainty in a simulation’s logic is usually convolved with uncertainty in the underlying assumptions about the futures of energy prices and technology innovation and availability. By comparing simulated alternative energy vehicle (AEV) sales to historical sales data, one can assess the simulation’s ability to capture the dynamics of consumer choice, independent of many of those underlying uncertainties, thereby determining the factors that most strongly impact sales.