Unveiling the Road Ahead: Modeling Vehicle Ownership Growth in the
Dominican Republic using Gompertz curve
Oliver González-Sánchez∗
May 2023
1. Introduction
Economic expansion plays a pivotal point in shaping
transportation demand and exacerbating traffic con-
gestion. As commercial activities flourish, transactions
boost and travels multiply. Simultaneously, rising
incomes afford individuals the means to fulfill their
social aspirations of owning private transportation,
which further amplifies overall traffic volumes.
Unfortunately, the continuous increase in demand for
public road usage, combined with the absence of an effi-
cient public transportation system and forward-looking
city planning, leads to adverse consequences. Travel
times become longer, fuel consumption escalates, and
productivity suffers due to mobility delays.
To accurately evaluate the future of the country’s
transportation network and develop effective policies
to address this adverse panorama, it is essential that
academic researchers, civil engineers and policymakers
count on precise forecasts of vehicle ownership dynam-
ics. This is particularly important considering the rapid
expansion of the country’s vehicle fleet over the past
two decades, the current levels of traffic congestion1 ,
and DR’s optimistic medium-term economic outlook.
Vehicle ownership is a complex phenomenon influenced
by various socioeconomic factors. Among these, per
capita income has been widely used to explain motoriza-
tion density’s evolution. Extensive empirical evidence
reveals that the positive relationship between these
two variables is non-linear and follows a distinctive
sigmoidal shape, an “S-shaped curve.” This implies
that, initially, as per capita income rises, the vehicle
∗ oliverantoniogonzalez@gmail.com
1 González-Sánchez
and Greneway (2019) found Dominicans lose
14.3 minutes per trip in traffic jams.
park experiences an accelerating growth rate. However,
this growth eventually decays as real per capita income
reaches a threshold, approaching a saturation point.
At this stage, where a significant portion of potential
buyers already own a vehicle, further income increments
have a diminishing impact on motorization rates.
Consequently, traditional linear regression approaches
become inadequate for accurately capturing and mod-
eling the vehicle demand function directly. To address
this, alternative modeling frameworks, such as the
Gompertz curve, have been employed to effectively
capture the non-linear dynamics and provide a more
robust representation.
2. Model
The Gompertz curve, introduced by the renowned
British statistician and mathematician Benjamin
Gompertz in 1825, initially found its applications in
the fields of actuarial sciences, population growth, and
biology (Felis, Moral y Pérez, 2016).
Over the course of a century, Gompertz curve caught the
attention of economists, with Prescott (1922) being the
pioneer to utilize it in modeling demand growth. Ex-
panding on Prescott’s work, numerous researches later
refined the curve to better capture the motorization be-
havior of their economies as:
−βgt
Vt = λe−αe (1)
Where Vt are the vehicles per 1,000 people, gt is
the GDP per capita at constant prices, α and β are
parameters defining the curvature of the function, and
λ describes the saturation condition, taken as the max
vehicle ownership a country will reach as income rises.
Equation (1) can be transform by taking the logarithmic
operation on both sides and organizing to obtain: 3. Data
λ The estimation of parameters x and β relies on annual
ln = αe−βgt (2)
Vt vehicle park and GDP per capita at constant 2017
Log-linearizing equation (2) results in: international dollars data, published by Dominican
Republic’s Internal Revenue Agency (DGII) and the
 λ
ln ln = lnα − βgt (3) International Monetary Fund (IMF), respectively, for
Vt
the 1998-2022 period. Additionally, the saturation
  parameter λ was calibrated at 730 vehicles per 1000
Making ln ln Vλt = vt and lnα = x, the equation can
people, in line with the estimates provided by Dargay
be converted to:
(2001) specific to the country. Furthermore, to capture
vt = x − βgt (4)
the impact of the COVID-19 pandemic, a dichotomous
Where x and β can be estimated econometrically by an variable was introduced into the econometric estimation
Ordinary Least Squares (OLS) linear regression model. as a control measure, taking the value of 1 in 2020.
Subsequently, the estimated parameters are evaluated
in equation (1) to derive estimates of motorization rates 4. Results
based on expected income behavior.
The econometric estimation of the parameters in the
Differentiating (1) the long-run income elasticity is cal- Gompertz function yields robust results that are statis-
culated as: tically significant and consistent with the expected sign
ηtLR = αβgt eβgt (5) according to the specialized empirical literature. There-
fore, the vehicle fleet growth model based on real per
Following Kresnanto (2019) this elasticity remains
capita income can be described as:
positive across all income levels and it increases until
−1.22x10
−4
reaching a maximum at GDP per capita = −1 β . By
gt
Vt = 730e−4.659e (6)
mathematical construction, the implied long-run elas-
ticity of the vehicle fleet with respect to income is not In-sample estimations using equation (6) demonstrate
isoelastic. that the functional form accurately captures the ob-
served motorization behavior. This not only vali-
The economic rationale for this non-constant elasticity
dates the calibration and estimation exercises but also
is rooted in the premise that as income levels start low,
strengthens the case for utilizing the model in forecast-
the affordability barrier inhibits motorization growth,
ing future motorization trends.
according to Glaeser, Kahn, and Rappaport (2008).
Yet, as incomes rise, individuals can allocate more Figure 1. Comparative examination of the model
resources to purchasing vehicles, sparking a surge in
demand fueled by the desire for mobility and status.
Nevertheless, a saturation point is reached eventually,
as identified by Dargay and Hanly (2004), marked by
limited parking space, increased traffic congestion, and
the availability of alternative transportation options,
causing vehicle ownership to stabilize and become less
responsive to further increases in per capita income.
Instead, vehicle ownership growth aligns more closely
with population growth rather than income growth,
indicating a state of equilibrium in the market.

Source: Own estimations.

According to the computed growth model, for every in-
come level, motorization in the Dominican Republic is
expected to evolve as depicted by figure 2.
Figure 2. Dominican Vehicle Fleet Growth Model
and around 2.0 million more vehicles in the next decade.
Moreover, in light of the current geographical distribu-
tion and composition of the vehicle park, it is expected
that by 2028, an additional 262.4 thousand cargo trucks,
trucks, buses, SUVs, and cars will worsen traffic conges-
tion in Santo Domingo and the Distrito Nacional. Addi-
tionally, an estimated addition of 182.4 thousand motor-
cycles will further contribute to the congestion. This is a
concerning prospect, especially considering the already
slow average speed of transportation, which gravitates
around 9 kilometers per hour in these metropolitan ar-
eas.

Table 1. Vehicle Park Forecast 2024-2034

*Vehicle Park Motorization Rate

(Millions of Vehicles) (Vehicles per 1000 people)
Source: Own estimations. 2024 5.73 531
2025 5.97 549
Based on the modeling exercise, the motorization dy- 2026 6.20 566
namic in the Dominican Republic is unlikely to become 2027 6.42 582
2028 6.64 597
more responsive to increases in per capita income. This
2029 6.85 612
is, the demand for vehicle ownership already surpassed 2030 7.05 626
the stage of maximum elasticity, and motorization rates 2031 7.25 638
are expected to follow a steady growth as income con- 2032 7.43 650
2033 7.60 661
tinues its upward trajectory.
2034 7.76 670
Figure 3. Implied Income Elasticity *Includes motorcycles, cars, jeeps, cargo vehicles, buses, heavy
machinery, dump trucks, and others.
Source: Own estimations.

4. Conclusion

The findings from the developed mathematical model,

which captures the relationship between motorization
rates and income per capita in the DR, emphasize the
importance of addressing the anticipated growth in the
vehicle population.

The fitted Gompertz curve predicts a substantial

Source: Own estimations.
However, considering DR’s macroeconomic outlook
and demographic trends, the mathematical model
predicts a substantial 21.5% growth in the vehicle park
over the next five years, reaching approximately 6.6
million vehicles by 2028. These figures emphasize the
forthcoming challenge of accommodating an additional
1.2 million vehicles on the roads in the near future,
increase of 1.2 million vehicles over the next five years
and 2.0 million over the next decade, which will worsen
traffic congestion, particularly in Santo Domingo and
the Distrito Nacional, where the slow average speed of
transportation is already a concern.
Efforts to address these worrisome predictions are
crucial to alleviate the growing traffic burden and en-
sure smoother movement for residents and commuters.
Unveiling the road ahead, authorities must explore
comprehensive supply and demand side measures to
strategically affect the relative prices of transportation.
The cost of inaction far exceeds the budgetary and
political cost of shaping the incentive schemes to tackle
traffic congestion.

5. References

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• Glaeser, E. L., Kahn, M. E., & Rappaport, J.

(2008). Why do the poor live in cities? The role
of public transportation. Journal of Urban Eco-
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• González-Sánchez, O., & Greneway, I. (2019). Lo

que el tiempo se llevó: Congestionamiento vehicular
en el Distrito Nacional. Investigaciones ganadoras
2do concurso de investigación social de la vicepres-
idencia de la República Dominicana, 29-82.

• Kresnanto, N. C. (2019). Model of relationship be-

tween car ownership growth and economic growth
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