ABSTRACT
The objective of this chapter is to examine the main determinants of the demand for motorcars in Jordan. A stock adjustment model that views consumers as attempting to adjust actual to desired stocks of automobiles is employed to analyse consumer behaviour. The empirical analysis is presented in two parts. The first part aims to investigate the effects of income, relative prices and credit availability on the demand for motorcars where the stock of automobiles and the annual purchases are alternately used as the dependent variables. In the second part, an attempt is made to examine the influence of monetary variables on the demand for automobiles where consumer expenditures on motorcars are taken as the dependent variable and treated as investment (Hamburger 1967, p. 1,131). To measure monetary variables, interest rates, the aggregate money supply and the rate of change in money supply are taken.
