Date of Submission
Open Access Senior Thesis
Bachelor of Arts
© 2023 Jackson G Aldrich
This paper examines the impact of macroeconomic factors and the COVID-19 pandemic on new vehicle sales. In order to address these two topics, a two-pronged approach was used with separate regression models. The macroeconomic variables include monthly supply of new homes, CPI for urban public transportation, unemployment rate, disposable personal income, inflation expectation, consumer sentiment, average gas prices, and total vehicle miles traveled which were regressed on total vehicle sales from 1978-2022. The regression results confirmed and supported current literature and highlighted the importance of the housing market and unemployment rate on new vehicle sales. The COVID-19 pandemic model variables include COVID-19 tests per capita, COVID-19 cases per capita, COVID-19 deaths per capita and a rural and political-leaning dummy from 2020-2022. These were divided into the 58 counties in California and regressed on the change in percent of vehicle registrations from 2019-2022. From the years 2020-2022, there is an individual regression to compare the trend during the COVID-19 pandemic. It was found that counties with fewer cases and more tests sold fewer vehicles, leading to the conclusion that stricter lockdown measures decreased the volume of vehicle sales and provided evidence that the COVID-19 pandemic was a transitory shock to the automotive market.
Aldrich, Jackson, "Driven by Change: The Impact of Macroeconomic Shifts and COVID-19 on New Vehicle Sales" (2024). CMC Senior Theses. 3445.