The effect of the oil crisis on the growth in the ownership and use of cars

Since the oil crisis of 1973, a number of studies have been made in various countries of the effects of the rise in petrol prices on the level of traffic flow, but rather fewer have attempted to delineate the complex chain of reactions within the car market set off by this impulse. We attempt to do this, using data from the UK.Since 1966 during the prediction stage of the first London Transportation Study it became obvious that low income and high income households had different rates of growth of car ownership, mainly because low income households bought cheap, old cars which vary in quantity and price differently from expensive, new cars. The Greater London Council therefore sponsored a study of car prices by age and size, starting from 1957 annually, and since the oil crisis, evaluated monthly. This has enabled us to examine the strong change in trend that had occurred, with large cars depreciating 15% per annum more than the smallest. The quantities of cars of each size registered each month are available from national statistics and this enables us to say that the previous 1% per annum increase in car size was arrested, with new cars becoming substantially smaller.A model of the car market has been developed which relates on the one hand the price distribution of cars by age, and on the other hand the price. distribution of the stock of cars owned at each household income level. Via the expenditure on car purchase at each household income level and the distribution of the length of time between purchase and resale of cars, a fully dynamic model has been developed to relate expenditure flow and stock. This enables us to test the effect of different trends on the dynamic equilibrium in the car market.The implications of the two trends noted above on the prediction of future car ownership growth are discussed, with the standstill since the oil crisis attributed to petrol prices via the split in household expenditure between purchase and use.     

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 association between transit access and auto ownership: evidence from Guangzhou,China

In many developing countries, massive investment in transit infrastructure is concurrent with the proliferation of automobiles. Planners expect that investment can slow the growth of auto ownership. However, few studies have examined the relationships between transit access and auto ownership in developing countries, whereas research in developed countries offers mixed findings and the outcomes may not be applicable to developing countries. This study employs a random effect ordered probit model on data collected from Guangzhou residents in 2011–2012. We find that transit access is negatively associated with auto ownership, after controlling for demographics and other built environment variables. This result suggests that, although income is the dominant driver for auto ownership in growing developing countries, transit investment is a promising strategy to slow the growth of auto ownership. This study also highlights the importance of addressing spatial dependency in clustered data.     

The effect of the price of gasoline on the urban economy: From route choice to general equilibrium

RELU-TRAN2, a spatial computable general equilibrium (CGE) model of the Chicago MSA is used to understand how gasoline use, car-VMT, on-the-road fuel intensity, trips and location patterns, housing, labor and product markets respond to a gas price increase. We find a long-run elasticity of gasoline demand (with congestion endogenous) of ?0.081, keeping constant car prices and the TFI (technological fuel intensity) of car types but allowing consumers to choose from car types. 43% of this long run elasticity is from switching to transit; 15% from trip, car-type and location choice; 38% from price, wage and rent equilibration, and 4% from building stock changes. 79% of the long run elasticity is from changes in car-VMT (the extensive margin) and 21% from savings in gasoline per mile (the intensive margin); with 83% of this intensive margin from changes in congestion and 17% from the substitution in favor of lower TFI. An exogenous trend-line improvement of the TFI of the car-types available for choice raises the long-run response to a percent increase in the gas price from ?0.081 to ?0.251. Thus, only 1/3 of the long-run response to the gas price stems from consumer choices and 2/3 from progress in fuel intensity. From 2000 to 2007, real gas prices rose 53.7%, the average car fuel intensity improved 2.7% and car prices fell 20%. The model predicts that from these changes alone, keeping constant population, income, etc. aggregate gasoline use in this period would have fallen by 5.2%.     

A model to assess public transport demand stability

Transport authorities, especially those in developing countries where rising income stimulate increased car ownership rates, are often concerned with maintaining or increasing levels of public transport use. Therefore, the ability to identify clients at risk of abandoning the system can be valuable for remedial measures, allowing for more focused quality improvements. We present and apply a model that determines the probability of migrating from public to private transport at both aggregated and disaggregated levels. In application, the model predicted migration with 60% accuracy in the first preference recovery measure. The proposed model can improve the understanding of the behavior of public transport users, the analysis of demand stability and the factors influencing migration. This, in turn, can help to focus policy and management measures and increase the efficiency of public investment.     

Energy use in passenger transport in OECD countries: Changes since 1970

This paper analyzes some of the changes that took place in the structure of energy use for passenger travel in industrialized countries. Data is presented on energy use and travel activity for the four major modes of travel — automobile, bus, rail and air — for eight OECD countries: the United States, Japan, the United Kingdom, West Germany, France, Italy, Sweden, and Norway. We use the Laspeyres and Divisia indices to analyze the causes of the change in energy use between 1970 and 1987. The total change in energy use for travel is explained by changes in domestic passenger transport volumes, the mix of modes of travel, and the energy intensities of each mode. We have found two important effects that have a fundamental impact on energy use for travel since 1970. First, shifts among modes of transport towards more energy-intensive ones and large increases in volumes of travel (measured in passenger-kilometers) increased energy use for travel in many OECD countries, often more rapidly than the overall growth in GDP. Second, energy intensities, measured in mJ/passenger-kilometer, of passenger transport fell only in a few countries between 1970 and 1987. Even though individual automobiles have become more energy-efficient, greater size, power, and weight, worsening traffic conditions in Japan and Europe, and fewer people in cars restrained or even offset efficiency improvements. Particularly notable are the increases in intensities in Japan and Germany. The most important exception to this trend was the United States, but the intensities of land-based travel remain higher there than in most other countries. These findings lead to a pessimistic outlook for future energy use for travel. After all, if little or no energy was saved during the decades of high fuel prices, what can be expected in the 1990s?     

Modelling market diffusion of electric vehicles with real world driving data – German market and policy options

Plug-in electric vehicles (PEVs) have the potential to reduce green house gas emissions from the transport sector. However, the limited electric range of PEVs could impede their market introduction. Still some potential users are willing to pay more for PEVs. The combined effect of these and other influencing factors as well as the resulting future market evolution are unclear. Here, we study the market evolution of PEVs in Germany until 2020. Our results reveal a great deal of uncertainty in the market evolution of PEVs due to external conditions and the users’ willingness to pay. We find the future share of PEVs in German passenger car stock to range from 0.4% to almost 3% by 2020. Energy prices have a large impact on PEV market evolution as a 25% increase in fuel prices would double the number of PEVs in stock by 2020 compared to a reference scenario. We find a special depreciation allowance for commercial vehicles and a subsidy of 1000 Euro as the most effective and efficient monetary policy options. The high uncertainty of the market evolution implies that policies to foster market diffusion of PEVs should be dynamically adaptable to react to changing framework conditions.     

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.     

The effect of prices and income on car travel in the UK

The objective of this paper is to analyse the factors determining household car travel, and specifically the effects of household income and the prices of cars and motor fuels, and to explore the intertemporal pattern of adjustment. The question of asymmetry in the response to rising and falling income is also addressed. Such asymmetry may be caused by habit or resistance to change or the tendency to acquire habits to consume more easily than to abandon them. The impact of prices, the speed of adjustment and the resistance to change will be important in determining the possibility of influencing travel behaviour and specifically car use. The study utilises repeated cross-section data from the annual UK Family Expenditure Surveys and employs a pseudo-panel methodology. The results are compared with those for car ownership estimated on the basis of similar models.     

Determinants of new vehicle registrations in EU countries: a panel cointegration analysis

This paper investigates the determinants of new vehicle registrations in European Union (EU) countries by focusing on four particular segments – passenger cars, light commercial vehicles, commercial vehicles, and heavy commercial vehicles. A panel cointegration analysis for a panel of 13 EU countries during the period from January 1999 to August 2010 shows that new vehicle sales have long-run cointegration relations with vehicle prices, consumer confidence, income, interest rates, fuel prices, industrial production, and trade. More effective factors in determining new vehicle sales appear to be trade, interest rates, and industrial production.     

Explaining “peak car” with economic variables

Many western countries have seen a plateau and subsequent decrease of car travel during the 21st century. What has generated particular interest and debate is the statement that the development cannot be explained by changes in traditional explanatory factors such as GDP and fuel prices. Instead, it has been argued, the observed trends are indications of substantial changes in lifestyles, preferences and attitudes to car travel; what we are experiencing is not just a temporary plateau, but a true “peak car”. However, this study shows that the traditional variables GDP and fuel price are in fact sufficient to explain the observed trends in car traffic in all the countries included in our study: the United States, France, the United Kingdom, Sweden and (to a large extent) Australia and Germany. We argue that the importance of the fuel price increases in the early 2000s has been underappreciated in the studies that shaped the later debate. Results also indicate that GDP elasticities tend to decrease with rising GDP, and that fuel price elasticities tend to increase at high price levels and during periods of rapid price increases.     

Estimating the long-term effects of different passenger car technologies on energy/fuel consumption and emissions of greenhouse gases in Europe

Abstract

A stated preference (SP) experiment of car ownership was conducted in Mumbai Metropolitan Region (MMR) of Maharashtra in India. A full factorial experiment was designed to considering various attributes such as travel time, travel cost, projected household income, car loan payment and servicing cost. Data on 357 individuals were collected which resulted in 3213 observations for the calibration of the work trip and recreational trip car ownership models. The car ownership alternatives considered 0, 1 and 2 cars. A multinomial logit framework was used to develop the car ownership model taking the household as a decision unit. The specification and results of the SP car ownership model are discussed. The observed and predicted values matched reasonably when the validity of the SP car ownership model was tested against revealed preference (RP) data. The car ownership models developed in this study exhibit a satisfactory goodness of fit. It is concluded that the SP modelling approach can be successfully used for modelling car ownership decisions of households in developing countries.     

The role of expectations on automobile demand

This study investigates the influence of adaptive expectations on the purchase of automobiles by income quintile. Through maximum likelihood estimation, it is found that the coefficients of adaptation to income exhibit a trend towards faster rates in the upper quintiles. The effects of a “truncation remainder” and of serial correlation are also noted.     

Sustainability and automobility among the elderly: An international assessment

In the next three decades there will a huge increase in both the absolute number of older people and in their percentage of the populationin almost all Western European countries, North America, and Australia. Most older people will have active lifestyles in which mobility and access play a major role and almost all older men and a majority of older women will be car drivers, used to the convenience and flexibility which the car provides.Using data from the US, Australia, Germany, New Zealand, Norway, and the United Kingdom, the paper shows that, in spite of cultural and policy differences, older people around the world are more likely to have a license, to take more trips, and to do so more often as the driver of a car than older people just a decade ago; they are also less likely to use public transit. These trends have a number of sustainability implications – the most obvious one is increased environmental pollution. For example, even though older people may travel less than younger drivers they may be polluting proportionately more because a) they are less likely to make as great a proportion of trips in public transit as younger people and b) the trips they do make may create more pollutants. In addition, older drivers may incur more wasted miles due to wayfinding errors and trip-scouting behavior. And when older people curtail their driving, younger family members may have to increase (or lengthen) their trip-making to provide needed services or additional transportation.While this paper stresses the environmental problems posed by an aging population, effective strategies arise from a focus on a broader definition of sustainability. The most important approach is to accept the inevitable and work to make the private car "greener" and safer. New transit service concepts and strategic community and neighborhood design and service elements can complement the development of cleaner cars.Although many of the potential strategies are not new, or can be expensive to implement, the convergence of environmental concerns with other problems arising from the automobility of the elderly – including increasing crash rates and serious loss of mobility among those unable to drive – may make these policies more politically viable than in the past.     

The endogeneity of OECD gasoline taxes: Evidence from pair-wise,heterogeneous panel long-run causality tests

Despite the current interest in using fuel taxes as an instrument for climate policy, there has been little study of current automotive fuel tax regimes. We expand on two earlier cross-sectional studies on why fuel taxes differ across countries by using OECD panel data and employing heterogeneous panel cointegration and long-run panel Granger-causality techniques. We confirm some of those earlier studies’ conclusions. Further, we find that governments that rely on consumption-based taxes for revenues will have higher gasoline tax rates (than governments that rely on income and wealth/property-based taxes). But more significantly, we determine that higher gasoline demand among consumers “causes” democratic governments to set lower gasoline taxes—a finding with important implications for today’s climate/energy policy debate.     

Do fewer people mean fewer cars? Population decline and car ownership in Germany

Drawing on household data from Germany, this study econometrically analyzes the determinants of automobile ownership, focusing specifically on the extent to which decreases in family size translate into changes in the number of cars at the national level. Beyond modeling several variables over which policy makers have direct leverage, including the proximity of public transit, fuel prices and land use density, the analysis uses the estimated coefficients from a multinomial logit model to simulate car ownership rates under alternative scenarios pertaining to demographic change and other socio-economic variables. Our baseline scenario predicts continued increases in the number of cars despite decreases in population, a trend that is attributed to continued increases in household income.     

Car ownership,travel and land use: a comparison of the US and Great Britain

This paper conducts an international comparative analysis of relationships between car ownership, daily travel and urban form. Using travel diary data for the US and Great Britain, we estimate models of car ownership and daily travel distance. Both a structural model with daily travel conditional upon car ownership and a reduced form model for daily travel, excluding car ownership, are estimated. Model results are similar, and show that differences in travel are explained by (1) differences in demographics between the two countries; (2) lower household income in Great Britain; (3) country specific differences in costs of car ownership and use, transport supply and other factors we have not been able to control. We find that metropolitan size affects travel only in the largest metropolitan areas of the US. Daily travel distance is inversely related to local population density, but the effect is much stronger for the US than Great Britain. We conclude that higher transport costs in Great Britain promote economizing behavior, which in turns leads to more consumption of local goods and services and more use of alternative transport modes.     

The effect of attitudes toward cars and public transportation on behavioral intention in commuting mode choice—A comparison across six Asian countries

This study investigated the contribution of psychological factors in explaining the choice of transportation mode in six Asian countries. Data were collected from 1118 respondents in Japan, Thailand, China, Vietnam, Indonesia, and the Philippines. The dependent variable was the intention to use one of three modes for work travel after getting a job: car, public transit, or other modes. The explanatory variables were three attitude factors taken from a previous study, including: 1/symbolic affective, reflecting affective motives of travel mode use; 2/instrumental, referring to functional attributes of travel modes; and 3/social orderliness which represents for environmental friendliness, safety, altruism, quietness et cetera. Several logit model estimates were made using the samples from the six countries separately and together. We obtained three main findings. First, attitude variables about the car were all significant determinants for the entire sample from Asian countries. Second, the social orderliness aspect of public transit was a common concern of respondents from developing countries in selecting this mode for work trips. Third, in countries in which the intent to use a car was not very high, attitude factors about the car were found to be significant determinants of the behavioral intention to commute by car but were less significant in countries in which the desire to use a car was high.     

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.