On the income elasticity of the value of travel time

Transport infrastructure is long-term and in appraisal it is necessary to value travel time savings for future years. This requires knowing how the value of time (VTT) will develop over time as incomes grow. This paper investigates if the cross-sectional income elasticity of the VTT is equal to inter-temporal income elasticity. The study is based on two identical stated choice experiments conducted with a 13 year interval. Results indicate that the relationship between income and the VTT in the cross-section has remained unchanged over time. As a consequence, the inter-temporal income elasticity of the VTT can be predicted based on cross-sectional income elasticity. However, the income elasticity of the VTT is not a constant but increases with income. For this reason, the average income elasticity of the VTT in the cross-sections has increased between the two survey years and can be expected to increase further over time.     

Does the income elasticity of road traffic depend on the source of income?

An extensive body of literature addresses the income elasticity of road traffic, in which income is typically treated as a homogenous quantity. Here we report evidence of heterogeneity in cross-sectional estimates of the elasticity of vehicle-kilometres of travel (VKT) with respect to income, when household income is disaggregated on the basis of income source.The results are generally intuitive, and show that the cross-sectional income elasticity of road traffic is not homogeneous as is typically specified in transport planning models. We show that in a number of circumstances the cross-sectional elasticity with respect to aggregate household income is of the opposite sign in comparison to more refined estimates of elasticity disaggregated by income source. If further research confirms that the elasticities we report here are causal in nature, neglecting the elemental effects could result in misleading results affecting practical infrastructure-investment and policy decisions, particularly as the mix of income sources shifts (e.g. if, as society ages, pension income increases as a share of all income).These results are of interest to both researchers and forecasters of travel demand, as well as designers of future travel survey instruments; the latter group must decide how to generate data about respondents’ income. Current expert guidance is to collect a single estimate of aggregate income at the household level. Future travel survey design choices will bound the analyses that can be supported by the resulting survey data, and therefore methodological research to re-visit the trade-offs associated with such choices is warranted.     

The effect of income on car ownership: evidence of asymmetry

This paper examines the effect of income on car ownership, and specifically the question of hysteresis or asymmetry. Although there is little doubt that rising income leads to higher car ownership, less is understood about the effect of falling income. Traditional demand modelling is based on the implicit assumption that demand responds symmetrically to rising and falling income. The object of this study is to test this assumption statistically. Using a dynamic econometric model relating household car ownership to income, the number of adults and children in the household, car prices and lagged car ownership, income decomposition techniques are employed to separately estimate elasticities with respect to rising and falling income. The equality of these elasticities – no hysteresis – is tested statistically against the inequality – hysteresis – hypothesis. Various functional specifications are tested in order to assure the robustness of the results to assumptions concerning functional form. The estimation is based on cohort data constructed from 1970 to 1995 UK Family Expenditure Surveys, and a pseudo-panel methodology is employed. The results indicate that car ownership responds more strongly to rising than to falling income – there is a ‘stickiness’ in the downward direction. In addition, there is evidence that the income elasticity is not constant, but instead declines with increasing car ownership.     

Impact of fuel price on vehicle miles traveled (VMT): do the poor respond in the same way as the rich?

The effects of fuel price on travel demand for different income groups reveal the choices and constraints they are faced with. The first purpose of this study is to understand these underlying choices and constraints by examining the variation of fuel price elasticity of vehicle miles travelled (VMT) across income groups. On the other hand, the rebound effect—increase in VMT as a result of improvement in fuel efficiency may offset the negative effect of fuel price on VMT. The second purpose of this study is to compare the relative magnitudes of the fuel price elasticity of VMT and the rebound effect. A system of structural equations with VMT and fuel efficiency (MPG, miles per gallon) as endogenous variables is estimated for households at different income levels from 2009 National Household Travel Survey. Higher income households show greater fuel price elasticity than lower income households. Fuel price elasticities are found to be ?0.41 and ?0.35 for the two highest income groups, while an elasticity of ?0.24 for the lowest income group is identified. The rebound effect is found to be only significant for the lowest income households as 0.7. These findings suggest the potential ability of using fuel price as a tool to affect VMT. The study results also suggest possible negative consequences faced by lower income households given an increase in fuel price and call for more studies in this area.     

The systemic,long-run relation among gasoline demand,gasoline price,income, and vehicle ownership in OECD countries: Evidence from panel cointegration and causality modeling

This paper looks at relationships between gasoline consumption per capita, income, gasoline price, and car ownership for a panel of OECD countries. Estimated long-run and short-run income elasticities are smaller than typically found and gasoline consumption is Granger-caused by gasoline price, but not by car ownership or income. Car ownership is Granger-caused by income and at the margin by gasoline consumption, but not by gasoline price.     

The asymmetric effects of income and fuel price on air transport demand

Forecasts of passenger demand are an important parameter for aviation planners. Air transport demand models typically assume a perfectly reversible impact of the demand drivers. However, there are reasons to believe that the impacts of some of the demand drivers such as fuel price or income on air transport demand may not be perfectly reversible. Two types of imperfect reversibility, namely asymmetry and hysteresis, are possible. Asymmetry refers to the differences in the demand impacts of a rising price or income from that of a falling price or income. Hysteresis refers to the dependence of the impacts of changing price or income on previous history, especially on previous maximum price or income. We use US time series data and decompose each of fuel price and income into three component series to develop an econometric model for air transport demand that is capable of capturing the potential imperfectly reversible relationships and test for the presence or absence of reversibility. We find statistical evidence of asymmetry and hysteresis – for both, prices and income – in air transport demand. Implications for policy and practice are then discussed.     

Job accessibility and employment outcomes: which income groups benefit the most?

Improving job accessibility can increase the probability for individual persons to be employed and reduce their commutes. Empirical research suggests that the relationship between job accessibility and employment outcomes differ across income groups, but no research has investigated the difference or explored which income groups benefit the most from job accessibility improvements. This research fills the gap by examining six income groups in the Los Angeles metropolitan area. Results show that job accessibility affects the employment status of medium-to-low income groups (household income between US$25,000 and US$75,000). For the lowest-income group (household income lower than US$25,000), owning a car significantly improves their chances to be employed, but job accessibility has no effect. On the other hand, higher job accessibility is associated with shorter commuting distance for the other five income groups, but not for the lowest-income group. These results suggest that transportation and land use policies need to address the specific needs of distinct population groups and underscore the importance of spatial access for the middle-class, which tends to be overlooked in the literature on transportation equity.     

Petrol expenditure and redistributive effects of its taxation in Spain

The objective of this paper is to estimate a petrol expenditure function for Spain and to evaluate the redistributive effects of petrol taxation. We use micro data from the Spanish Household Budget Survey of 1990/91 and model petrol expenditure taking into account the effect that income changes may have on car ownership levels, as well as the differences that exist between reported expenditure and real consumption during the week of reference. Our results show the importance that household structure, place of residence and income have on petrol expenditure patterns. We are able to compute income elasticities of petrol expenditure, both conditional and unconditional on the level of car ownership. Non-conditional elasticities, while always very close to unit values, are lower for higher income households and for those living in rural areas or small cities. When car ownership levels are taken as fixed, the conditional elasticity obtained is around one half the value of the non-conditional ones. As regards the redistributive effects of petrol taxation, we observe that for the lowest income deciles the share of petrol expenditure increases with income, and thus the tax can be regarded as progressive. However, after a certain income level the tax proves to be regressive.     

Policing the poor: The impact of vehicle emissions inspection programs across income

Comparing vehicle emissions inspection results with vehicle owner income shows that the Arizona vehicle emissions inspection program constrains the vehicle repair decisions of people in the low end of the income distribution more than people in the high end. Individuals who live in areas with lower annual income are both (i) more likely to drive vehicles that fail emissions inspections at a higher average rate, and (ii) more likely to fail emissions inspections conditional on vehicle characteristics. The top income quintile fails emissions inspections 20% less often than the bottom income quintile even when controlling for observable vehicle characteristics. This implies that owner characteristics, in addition to observable vehicle characteristics, have a non-negligible impact on vehicle emissions rates. Therefore, the impact of programs designed to reduce vehicle emissions could be greater if participation were subject to a means test.     

A structural and empirical model of subsistence activity behavior and income

This paper develops a structural and empirical model of subsistence activity behavior and income. Subsistence activity decisions (work participation and hours of work decisions) and income have an important bearing on activity and travel behavior of individuals. The proposed structural model represents an effort to analyze subsistence activity behavior and income earnings to support a better understanding, and reliable forecasting, of individual travel behavior. The empirical model formulates and estimates an integrated model of employment, hours of work and income which takes account of interdependencies among these choices and their structural relationships with other relevant variables. Social factors that inhibit an individual's employment and work hours decision and affect an individual's income are incorporated in the model. A sample of households from the Dutch National Mobility Panel is used in the empirical analysis.     

Effects of income inequality on evacuation,reentry and segregation after disasters

Large-scale disasters often trigger mass evacuation due to significant damages to urban systems. Understanding the evacuation and reentry (return) process of affected individuals is crucial for disaster management. Moreover, measuring the heterogeneity in the individuals' post-disaster behavior with respect to their socio-economic characteristics is essential for policy making. Recent studies have used large-scale location datasets collected from mobile devices to analyze post-disaster mobility patterns. Despite the availability of such data and the societal importance of the problem, no studies have focused on how income inequality affects the equity in post-disaster mobility. To overcome these research gaps, we overlay mobility data with income information from census to quantify the effects of income inequality on evacuation and reentry behavior after disasters, and the resulting spatial income segregation. Spatio-temporal analysis using location data of more than 1.7 million mobile phone users from Florida affected by Hurricane Irma reveal significant effects of income inequality on evacuation behavior. Evacuees with higher income were more likely to evacuate from affected areas and reach safer locations with less damage on housing and infrastructure. These differences were common among evacuees from both inside and outside mandatory evacuation zones. As a result of such effects of inequality, significant spatial income segregation was observed in the affected areas. Insights on the effects of income inequality on post-disaster mobility and spatial segregation could contribute to policies that better address social equity in pre-disaster preparation and post-disaster relief.     

Selfishness and altruism in the distribution of travel time and income

Most economic models assume that individuals act out their preferences based on self-interest alone. However, there have also been other paradigms in economics that aim to capture aspects of behavior that include fairness, reciprocity, and altruism. In this study we empirically examine preferences of travel time and income distributions with and without the respondent knowing their own position in each distribution. The data comes from a Stated Preference experiment where subjects were presented paired alternative distributions of travel time and income. The alternatives require a tradeoff between distributional concerns and the respondent’s own position. Choices also do not penalize or reward any particular choice. Overall, choices show individuals are willing forgo alternatives where they would be individually well off in the interest of distributional concerns in both the travel time and income cases. Exclusively self-interested choices are seen more in the income questions, where nearly 25 % of respondents express such preferences, than in the travel time case, where only 5 % of respondents make such choices. The results also suggest that respondents prioritize their own position differently relative to regional distributions of travel time and income. Estimated choice models show that when it comes to travel time, individuals are more concerned with societal average travel time followed by the standard deviation in the region and finally their own travel time, while in the case of income they are more concerned with their own income, followed by a desire for more variability, and finally increasing the minimum income in their region. When individuals do not know their fate after a policy change that affects regional travel time, their choices appear to be mainly motivated by risk averse behavior and aim to reduce variability in outcomes. On the other hand, in the income context, the expected value appears to drive choices. In all cases, population-wide tastes are also estimated and reported.     

Measuring unobserved prices using the structural time-series model: The case of cycling

This study presents a means of determining a historic (generalised cost based) price index for cycling in the UK for the period 1949–2006 using annual demand data. By specifying demand as a function of generalised price and income and then applying a structural time-series model to elucidate the unobserved component of prices (while controlling for observed income levels), it is illustrated that the role of prices in influencing demand is non-trivial. Over the sample period price responses generally influence demand for cycling to a greater extent than income effects.     

Net tax incidence for urban public transit subsidies in New Zealand

This paper examines the impact of policy changes in the funding of New Zealand public transit modes.These changes, introduced in 1983, are evaluated in terms of the net incidence of public transit subsidy assistance, taking into account its source of funding and the income class of those commuters benefiting from the subsidy. The general conclusion is that the net incidence of subsidy assistance remains progressive (i.e., a transfer from high to low income commuters) following the introduction of shared funding on the predominant public transit modes (rail and bus), sourced from income tax (central government) and property tax (regional/local government). However, because of the predominance of medium to high income commuters on rail vis-a-vis bus and the traditional source of funding on these modes in terms of income tax (a progressive tax source) and property tax (a regressive tax source), the degree of progressivity previously associated with public transit subsidies has now substantially reduced.The analysis and opinions expressed in this paper are the responsibility of the author alone and do not purport to represent the views of the Ministry of Transport.     

A dynamic analysis of household car ownership

This paper examines the determinants of household car ownership, using Irish longitudinal data for the period 1995–2001. This was a period of rapid economic and social change in Ireland, with the proportion of households with one or more cars growing from 74.6% to 80.8%. Understanding the determinants of household car ownership, a key determinant of household travel behaviour more generally, is particularly important in the context of current policy developments which seek to encourage more sustainable means of travel. In this paper, we use longitudinal data to estimate dynamic models of household car ownership, controlling for unobserved heterogeneity and state dependence. We find income and previous car ownership to be the strongest determinants of differences in household car ownership, with the effect of permanent income having a stronger and more significant effect on the probability of household car ownership than current income. In addition, income elasticities differ by previous car ownership status, with income elasticities higher for those households with no car in the initial period. Other important influences include household composition (in particular, the presence of young children) and lifecycle effects, which create challenges for policymakers in seeking to change travel behaviour.     

The asymmetric income effect on household vehicle ownership in Taiwan: A threshold cointegration approach

This paper uses the asymmetric threshold cointegration test to examine the asymmetric relationship between household income and vehicle ownership in Taiwan, presenting estimated asymmetric error correction models. The empirical data include information on household income, car ownership and motorcycle ownership in different regions from 1974 to 2009. The results show that, first, motorcycle ownership is asymmetrically cointegrated with household income in each region, and car ownership is asymmetrically cointegrated with household income in all regions except Taipei city. Second, both car and motorcycle ownership levels increase faster than they decrease in the asymmetric adjustment of their long-run relationship. Third, sensitivity tests for the period 1987-2009 show that the cointegration relationship of the car ownership equations vanished. Finally, we find evidence on the effects of household income on motorcycle ownership, and the effects of income variables on car and motorcycle ownership are dissimilar. This study exhibits different results across regions. These findings may be related to the development of public transit system in each region.     

Mining factors affecting taxi drivers’ incomes using GPS trajectories

Taxis provide essential transport services in urban areas. In the taxi industry, the income level remains a cause of concern for taxi drivers as well as regulators. Mining underlying factors affecting the income level will not only benefit the newcomers and low-income drivers but also assist in developing effective optimization algorithms for taxi operations. This paper intends to disclose the factors affecting incomes along with their quantitative influence by mining over 167 million GPS records from nearly 8000 taxis in Shanghai. We first identify a marked difference in drivers’ incomes and categorize drivers into three income levels accordingly. We next investigate the overall search-delivery process, thereby defining several factors that may affect the income level. We then develop a generalized multi-level ordered logit (GMOL) model to find the significant factors that influence incomes. Finally, we compute the elasticity for those significant factors and present their contributions, as well as challenge some preconceived ideas regarding how to earn high incomes.     

Granger-causality between transportation and GDP: A panel data approach

This paper investigates the Granger-causality relationship between income and transportation of EU-15 countries using a panel data set covering the period 1970–2008. In the study, inland freight transportation per capita in ton-km (TRP), inland passenger transportation per capita in passenger-km (PAS), and road sector gasoline fuel consumption per capita in kg of oil equivalent (GAS) are used as transportation proxies and GDP per capita is used as measure of income. Our findings indicate that the dominant type of Granger-causality is bidirectional. Instances of one-way or no Granger-causality were found to correspond with countries with the lowest income per capita ranks in 1970 and/or in 2008. Although we conclude that there is an endogenous relationship between income and transportation, this is not observed until after an economy has completed its transition in terms of economic development.     

Gender differentials in travel pattern – The case of a mid-sized city,Rajkot, India

This paper is at the conjunction of arguments for gender equity in transport services on one hand and need to move towards low carbon transport on the other in a developing country city. The case study city, Rajkot, a mid-sized Indian city with mixed land use and limited public transport at the time of this study, has short trip lengths and low trip rates. But, even in this city there is gender disparity in travel pattern. Thus, trip rates and trip lengths of women in the city in each of the income group are lower than that of their male counter parts. With the increase in income, both, the trip rates and lengths increase, but, the increase is higher for men than for women. While the large proportions of women in each income group walk, that among the lowest income group walking is the predominant mode, as they are ‘no-choice’ or ‘forced’ walkers. With the increase in household income, women tend to shift to para-transit and men to personal motorized transport. If sustainability arguments or climate policies are to target retaining the current low ecological footprint of the women as one of the strategies, it needs to cater to expansion of their mobility while improving infrastructure to support the same.     

Transportation and income inequality in China: 1978–2007

This paper mainly studies how various types of transportation modes are associated with income inequality in China for the years between 1978 and 2007. Gini coefficients are used to measure the income inequality nationwide, and within urban and rural areas of China. Factors other than transportation are also considered in the regression model, including a few demographic variables and major economic indicators. We contribute to the literature by examining the income redistributive effects of transport infrastructure and services, and providing transport planning and policy guidance which may alter the orientation of public policy and help alleviate the growing social and economic imbalance in China.