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

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  • Jou, Rong-Chang
  • Huang, Wen-Hsiu
  • Wu, Yuan-Chan
  • Chao, Ming-Che
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    Abstract

    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.

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    Bibliographic Info

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

    Volume (Year): 46 (2012)
    Issue (Month): 4 ()
    Pages: 696-706

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    Handle: RePEc:eee:transa:v:46:y:2012:i:4:p:696-706

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    Related research

    Keywords: Household vehicle ownership; Asymmetric threshold cointegration test; Asymmetric error correction model;

    References

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    1. Lardic, Sandrine & Mignon, Valérie, 2008. "Oil prices and economic activity: An asymmetric cointegration approach," Energy Economics, Elsevier, vol. 30(3), pages 847-855, May.
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    13. Dargay, Joyce M., 2002. "Determinants of car ownership in rural and urban areas: a pseudo-panel analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 38(5), pages 351-366, September.
    14. Banerjee, Anindya & Dolado, Juan J. & Galbraith, John W. & Hendry, David, 1993. "Co-integration, Error Correction, and the Econometric Analysis of Non-Stationary Data," OUP Catalogue, Oxford University Press, number 9780198288107.
    15. Enders, Walter & Siklos, Pierre L, 2001. "Cointegration and Threshold Adjustment," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(2), pages 166-76, April.
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    Cited by:
    1. Shuhei Nishitateno & Paul J. Burke, 2014. "The motorcycle Kuznets curve," Departmental Working Papers 2014-04, The Australian National University, Arndt-Corden Department of Economics.

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