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.     

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 residential parking rent price elasticity of car ownership in Japan

By using household-level micro data captured through the National Survey of Family Income and Expenditure for 2004, this study evaluates the residential parking rent price elasticity of car ownership in Japan. It analyzes the number of cars owned by a household, using various attributes including expenditure for renting a parking space on a monthly basis. The estimation results derived from the IV-ordered probit model show that the absolute value of parking rent price elasticity of car ownership is, at most, 0.48, which is fairly small (i.e., inelastic). The elasticity value varies depending on city size; for megacities, elasticity is always negative for car ownership, whereas for middle-sized or small cities, towns, and villages, elasticity is positive for one-car ownership and negative for the ownership of more than one car. Hence, when the price of parking increases, some people may switch from more than one car to one car and some people in megacities may switch from one to zero cars. Indeed, the net effect of a price increase may be that non-car ownership increases in megacities and one-car ownership increases in other cities.     

A repeated cross-sectional evaluation of car ownership

This paper studies changes in the relationship between household car ownership and income by household type. Ordered response probit models of car ownership are estimated for a sample of households repeatedly at six time points to track the evolution of income elasticities of car ownership over time. Elasticities of car ownership are found to change over time, questioning the existence of a unique equilibrium point between demand and supply that is implicitly assumed in traditional cross-sectional discrete choice car ownership models. Moreover, different household types and households that underwent household type transitions showed differing patterns of change in elasticities. Observed trends in car ownership and income clearly show behavioral asymmetry where the elasticity of procuring an additional car is greater than that of disposing a car. This too shows the inadequacy of traditional cross-sectional models of car ownership which tend to predict symmetry in behavior. The study suggests the importance of incorporating dynamic trends into the forecasting process, which can be accomplished through the use of longitudinal data.     

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 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%.     

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.     

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 determinants of car ownership in England and Wales from anonymous 2001 census data

Within the transportation research literature, the attempt to understand and predict the level of car ownership is probably one of the most popular areas of study. The primary reason for this is understandable, having access to a vehicle increases an individual’s (or their household’s) travel options, leading to greater mobility. Secondary reasons for this scrutiny include the need to predict future transport investment in road infrastructure and the commercial demand for new vehicles. This paper attempts to predict the level of household car ownership as a function of the characteristics of the household and the individuals that make up the household. The primary data source for this study comes from the 2001 United Kingdom Census and the analysis methods used are from the discipline of data mining. The results of this study are in line with those from previous research but show a potential to predict the higher levels of household car ownership with greater accuracy than other similar studies.     

Using demand elasticities from disaggregate mode choice models

Three of the most highly regarded disaggregate mode split models incorporate very different estimates of the responsiveness, or elasticity, of mode choice to changes in auto travel times and costs. These differences appear to be due in part to the varying specifications used by the model, and particularly whether certain variables (such as a dummy variable for CBD destinations or automobile ownership) are included in addition to the more traditional variables (such as travel time, cost, and household income). More research is needed on the implications of the theory of traveler choices for model specification and the effect of alternative, but theoretically justifiable, specifications on elasticity estimates. Until this research reduces our uncertainty about the elasticity of demand, analysts evaluating transportation policies should assess the sensitivity of their results to the range of plausible elasticities or models.     

A dynamic model system of household car ownership,trip generation,and modal split: model development and simulation experiment

A dynamic model of household car ownership and mode use is developed and applied to demand forecasting. The model system consists of three interrelated components: car ownership, mechanized trip generation, and modal split. The level of household car ownership is represented as a function of household attributes and mobility measures from the preceding observation time point using an ordered-response probit model. The trip generation model predicts the weekly number of trips made by household members using car or public transit, and the modal split model predicts the fraction of trips that are made by public transit. Household car ownership is a major determinant in the latter two model components. A simulation experiment is conducted using sample households from the Dutch National Mobility Panel data set and applying the model system to predict household car ownership and mode use under different scenarios on future household income, employment, and drivers’ license holding. Policy implications of the simulation results are discussed.     

Auto travel fuel elasticity in a rapidly developing urban area

This paper presents results of a study conducted to quantify the effect of fuel cost increases on household auto travel in Riyadh, the rapidly developing capital of Saudi Arabia. Responses of a stratified random sample of 1648 individual households provided the data base for the analysis. The auto trip measures of shrinkage ratio, arc and log-arc elasticities were calculated for households categorized by income and family size. The elasticity measures suggested the existence of significant relationship among the factors of fuel cost, the number of daily auto trips, and family size. It was found that as fuel prices increased, the number of daily trips decreased, and that this decrease in daily trips was greater with larger family size. A step-wise multiple regression analysis with three independent variables of car ownership, family size, and daily fuel expenditures was developed. The model was fairly accurate in predicting variations in daily household travel. The regression parameter of the variable fuel cost was also used to derive demand elasticity to fuel expenditures. Elasticity measures ranged between -0.30 and -0.37.     

(Unintended) Transport impacts of an energy-environment policy: The case of CNG conversion of vehicles in Dhaka

Motor vehicles are one of the major sources of air pollution in Dhaka, the capital of Bangladesh. The government took various policies to convert the petroleum vehicles on road to run on compressed natural gas (CNG), which allows both air quality improvements and energy security benefits. One of the market friendly policies to encourage the fuel switch was to increase the price differential between CNG and petrol and diesel. This has allowed a wide-scale adoption of CNG as the fuel of choice. However, several years into the policy, there is now a widespread belief among the policymakers that the CNG conversion may have increased car ownership and car travel due to their lower running costs, resulting in more congestion and a reversal of the strategy is on the cards. It is therefore important to test the hypothesis whether CNG conversion had genuinely increased car ownership and car travel in Dhaka city. This paper presents the results of a questionnaire survey and an econometric intervention analysis to understand the impact of CNG conversion on car ownership and car travel in Dhaka. Attention is also given to disentangle the self-selection and price-induced travel effects of CNG conversion. Results show that ownership did not increase, but travel of on-road vehicles increased due to the CNG policy. However, additional congestion costs are still around one half of the health benefits brought about by the policy.     

Asymmetry in transport fuel demand: Evidence from household level data

Models for gasoline demand for transportation activities generally assume that demand is perfectly reversible with respect to gasoline price (and income). The small literature which relaxes the reversibility assumption in gasoline demand argues technological fixation leads to this asymmetry and utilizes aggregate time-series model to find evidence in favour of asymmetry. In this research it is suggested that there could also be behavioural factors behind this asymmetric response, possibly due to the loss aversion nature of human beings as described in the prospect theory. For the first time, household level data was used to understand asymmetry in gasoline demand in response to changes in gasoline price and income. There was statistical evidence that gasoline price and income both can induce asymmetric changes in gasoline demand among households. Specifically, elasticity with respect to rising prices and falling income is larger than the elasticity with respect to falling prices and rising income respectively, which is consistent with loss aversion in gasoline purchase behaviour. There was also some evidence of heterogeneity in the asymmetric responses between urban and rural households. The results have implications for transport-related energy tax policies or subsidies, while the method can be applied directly for non-energy goods as well.     

Changes in level of household car ownership: the role of life events and spatial context

Recent longitudinal studies of household car ownership have examined factors associated with increases and decreases in car ownership level. The contribution of this panel data analysis is to identify the predictors of different types of car ownership level change (zero to one car, one to two cars and vice versa) and demonstrate that these are quite different in nature. The study develops a large scale data set (n = 19,334), drawing on the first two waves (2009–2011) of the UK Household Longitudinal Study (UKHLS). This has enabled the generation of a comprehensive set of life event and spatial context variables. Changes to composition of households (people arriving and leaving) and to driving licence availability are the strongest predictors of car ownership level changes, followed by employment status and income changes. Households were found to be more likely to relinquish cars in association with an income reduction than they were to acquire cars in association with an income gain. This may be attributed to the economic recession of the time. The effect of having children differs according to car ownership state with it increasing the probability of acquiring a car for non-car owners and increasing the probability of relinquishing a car for two car owners. Sensitivity to spatial context is demonstrated by poorer access to public transport predicting higher probability of a non-car owning household acquiring a car and lower probability of a one-car owning household relinquishing a car. While previous panel studies have had to rely on comparatively small samples, the large scale nature of the UKHLS has provided robust and comprehensive evidence of the factors that determine different car ownership level changes.     

Estimating the demand for urban bus travel

The disadvantages of conventional transportation study models, in particular their large data requirements and their weaknesses in dealing with changes in trip generation rates have led to a need for a simple model that can quickly and at low cost examine alternative public transport strategies.This paper investigates simple economic models of bus demand, examines alternative variables that can be used and discusses some alternative model forms. It demonstrates the results of a model using data from twelve urban bus operators in Britain and compares the results with those from other types of study. The model utilises fare and service quality elasticities to explain the decline in passengers on urban bus services, and derives an average elasticity with respect to fare changes of –0.31 and with respect to service quality changes of +0.62. It is estimated that fare rises accounted for 13% of the 43% decline in passengers over the last fifteen years, vehicle mileage reductions for 14.3% and that only 15.7% was due to such factors as rising car ownership which are often given as the cause of declining bus patronage.The results, by showing that passengers are far more sensitive to changes in service than they are to fare rises, are a useful guide to the broader public transport policy issues, and the paper concludes that the model does provide a useful method of forecasting public transport demand at a strategic level. Further work is needed, however, to establish more accurate forecasts for different types of passenger and studies are now being undertaken to establish these and to construct an operational forecasting model that can be applied with only limited data requirements     

The demand for public transport. part II. supply and demand factors of public transport

Abstract

This two‐part article, concerned with the way public transport ridership is affected by the various relevant factors, is based on the Executive Summary of The Demand for Public Transport (Webster and Bly 1980), the report of the TRRL‐sponsored International Collaborative Study on Factors Affecting Public Transport Patronage. Part I of the article, which was concerned with the social and economic conditions in which public transport operates, showed the importance of the background factors such as income, car ownership and land use on public transport usage: it also indicated how the longer‐term impacts of the more direct demand factors (fares, service levels) often show themselves in changes in car ownership levels, activity patterns (i.e. where people live, work, shop, socialize, etc) and land‐use development.

Part II reviews the current state of knowledge on the effects of changes in fare levels and quality of service and of the introduction of various traffic and transport measures (traffic restraint, bus priority, etc): it outlines current methodology on costing public transport services and draws the supply and demand sides together in a consideration of particular strategies which are at the disposal of the operator, the planner and the policy maker.     

Empirical estimation of price and income elasticities of air cargo demand: The case of Hong Kong

This paper estimates the price and income elasticities of air cargo demand and examines how they may change after the 2008 financial crisis. Using a set of time series data, we simultaneously estimate the aggregated demand and supply functions of air cargo at Hong Kong International Airport (HKIA). We find that during the entire sampling period of 2001–2013, the price elasticity for air cargo transport demand at HKIA ranges from −0.74 to −0.29, suggesting that air cargo demand in Hong Kong reacts negatively to price (as expected) but does not appear to be very sensitive to price. The income elasticity ranges from 0.29 to 1.47 and appears sensitive to seasonality adjustment approaches. However, in terms of the speed of changes, air cargo demand changes much faster than overall economy, indicating the presence of a pro-cyclical pattern of air cargo traffic with respect to the overall economy. Our analysis shows that air cargo demand becomes more sensitive to changes in both price and income after 2008.