This project used detailed vehicle-level data to explore the entire process of household vehicle choice, holdings, and usage for the light duty fleet in California–the largest contributor to transportation emissions. By using cutting-edge statistical approaches grounded in economic modeling, we have advanced the understanding of how consumers make decisions that influence the evolution of the vehicle fleet in California. We find that there are importantdifferences across households in the sensitivity of travel and vehicle choice to the price of gasoline. We are the first to estimate a “portfolio effect” in household vehicle purchases, where attributes of one car affect the revealed desired choice of another. Results show that this effect influences the turn-over of the fleet, and potentially erodes energy savings from fuel economy standards. Finally, we develop a new model of vehicle choice and driving that incorporates key features of the decision-making process of forward-looking consumers. These innovations provide important insights into the effects of policies to further reduce transportation emissions in California.