Advanced Search
MyIDEAS: Login

The effect of income on car ownership: evidence of asymmetry

Contents:

Author Info

  • Dargay, Joyce M
Registered author(s):

    Abstract

    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.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.sciencedirect.com/science/article/B6VG7-43W04D7-3/2/87ef876fec99e8a303e630affd75f6aa
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Elsevier in its journal Transportation Research Part A: Policy and Practice.

    Volume (Year): 35 (2001)
    Issue (Month): 9 (November)
    Pages: 807-821

    as in new window
    Handle: RePEc:eee:transa:v:35:y:2001:i:9:p:807-821

    Contact details of provider:
    Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description

    Order Information:
    Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
    Web: https://shop.elsevier.com/order?id=547&ref=547_01_ooc_1&version=01

    Related research

    Keywords:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Deaton, Angus, 1985. "Panel data from time series of cross-sections," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 109-126.
    2. MacKinnon, James G. & White, Halbert & Davidson, Russell, 1983. "Tests for model specification in the presence of alternative hypotheses : Some further results," Journal of Econometrics, Elsevier, vol. 21(1), pages 53-70, January.
    3. Dargay, Joyce & Gately, Dermot, 1997. "The demand for transportation fuels: Imperfect price-reversibility?," Transportation Research Part B: Methodological, Elsevier, vol. 31(1), pages 71-82, February.
    4. Dargay, Joyce & Gately, Dermot, 1999. "Income's effect on car and vehicle ownership, worldwide: 1960-2015," Transportation Research Part A: Policy and Practice, Elsevier, vol. 33(2), pages 101-138, February.
    5. Kitamura, Ryuichi & Bunch, David S., 1990. "Heterogeneity and State Dependence in Household Car Ownership: A Panel Analysis Using Ordered-Response Probit Models with Error Components," University of California Transportation Center, Working Papers qt0qv4q55r, University of California Transportation Center.
    6. Golob, Thomas F., 1990. "The Dynamics of Household Travel Time Expenditures and Car Ownership Decisions," University of California Transportation Center, Working Papers qt1676t0bp, University of California Transportation Center.
    7. Goodwin, Phil, 1995. "Car Dependence," Transport Policy, Elsevier, vol. 2(3), pages 151-152, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Copenhagen Economics, 2010. "Company Car Taxation," Taxation Papers 22, Directorate General Taxation and Customs Union, European Commission.
    2. Dargay, Joyce, 2007. "The effect of prices and income on car travel in the UK," Transportation Research Part A: Policy and Practice, Elsevier, vol. 41(10), pages 949-960, December.
    3. Simon McDonnell & Brian Caulfield, 2011. "Measuring the Failure of Planning and Its Impact on Sustainable Travel in Dublin, Ireland," Energies, MDPI, Open Access Journal, vol. 4(5), pages 727-740, April.
    4. Badland, Hannah M. & Oliver, Melody & Kearns, Robin A. & Mavoa, Suzanne & Witten, Karen & Duncan, Mitch J. & Batty, G. David, 2012. "Association of neighbourhood residence and preferences with the built environment, work-related travel behaviours, and health implications for employed adults: Findings from the URBAN study," Social Science & Medicine, Elsevier, vol. 75(8), pages 1469-1476.
    5. Mintesnot Woldeamanuel & Rita Cyganski & Angelika Schulz & Andreas Justen, 2009. "Variation of households ’ car ownership across time: application of a panel data model," Transportation, Springer, vol. 36(4), pages 371-387, July.
    6. Steininger, Karl W. & Friedl, Birgit & Gebetsroither, Brigitte, 2007. "Sustainability impacts of car road pricing: A computable general equilibrium analysis for Austria," Ecological Economics, Elsevier, vol. 63(1), pages 59-69, June.
    7. Welch, Timothy F., 2013. "Equity in transport: The distribution of transit access and connectivity among affordable housing units," Transport Policy, Elsevier, vol. 30(C), pages 283-293.
    8. Lee, Backjin & Timmermans, Harry J.P., 2007. "A latent class accelerated hazard model of activity episode durations," Transportation Research Part B: Methodological, Elsevier, vol. 41(4), pages 426-447, May.
    9. John Eakins, 2013. "The Determinants of Household Car Ownership: Empirical Evidence from the Irish Household Budget Survey," Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) 144, Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey.
    10. Wang, Tingting & Chen, Cynthia, 2012. "Attitudes, mode switching behavior, and the built environment: A longitudinal study in the Puget Sound Region," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(10), pages 1594-1607.
    11. Roorda, Matthew J. & Carrasco, Juan A. & Miller, Eric J., 2009. "An integrated model of vehicle transactions, activity scheduling and mode choice," Transportation Research Part B: Methodological, Elsevier, vol. 43(2), pages 217-229, February.
    12. Nolan, Anne, 2010. "A dynamic analysis of household car ownership," Transportation Research Part A: Policy and Practice, Elsevier, vol. 44(6), pages 446-455, July.
    13. Matas, Anna & Raymond, Josep-LLuis, 2008. "Changes in the structure of car ownership in Spain," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(1), pages 187-202, January.
    14. Huang, Biao, 2007. "Random Utility Pseudo Panel Model and Application on Car Ownership Forecast," MPRA Paper 7778, University Library of Munich, Germany.
    15. Jou, Rong-Chang & Huang, Wen-Hsiu & Wu, Yuan-Chan & Chao, Ming-Che, 2012. "The asymmetric income effect on household vehicle ownership in Taiwan: A threshold cointegration approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(4), pages 696-706.
    16. Ottosson, Dadi Baldur & Chen, Cynthia & Wang, Tingting & Lin, Haiyun, 2013. "The sensitivity of on-street parking demand in response to price changes: A case study in Seattle, WA," Transport Policy, Elsevier, vol. 25(C), pages 222-232.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:35:y:2001:i:9:p:807-821. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.