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The Determinants of Household Car Ownership: Empirical Evidence from the Irish Household Budget Survey

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  • John Eakins

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    (School of Economics, University College Cork and Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey.)

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    Abstract

    This paper analyses the factors which influence the level of possession of cars in Irish households using four rounds of the Household Budget Survey, a large micro cross sectional data set of Irish households. Two qualitative choice models, the multinomial logit model and the ordered logit model are applied and their results compared. Based on various measures of fit, the multinomial logit model appears to be the preferred model. The main factors found to influence car possession include location, age, education and marital status of the head of household, use of public transport, the number of workers, number of non-workers and number of children in the household and total household expenditure. These factors are also consistently observed to influence car ownership over time although the effect of socioeconomic factors such as education and marital status appears to be diminishing. The number of workers in the household and total household expenditure are key determinants and mirror changes experienced at the macro level. The estimated income elasticities for these variables show that the number of workers in the household determines the decision to purchase more than one car to a greater extent than total household expenditure and total household expenditure determines the decision to purchase one car to a greater extent than the number of workers in the household.

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    Bibliographic Info

    Paper provided by Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey in its series Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) with number 144.

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    Length: 46 pages
    Date of creation: Nov 2013
    Date of revision:
    Handle: RePEc:sur:seedps:144

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    Keywords: Motor Vehicle ownership; Household Survey Data; Multinomial Logit Model; Ordered Logit Model; Income Elasticities.;

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    1. Berkovec, James & Rust, John, 1985. "A nested logit model of automobile holdings for one vehicle households," Transportation Research Part B: Methodological, Elsevier, vol. 19(4), pages 275-285, August.
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    3. Nolan, Anne, 2002. "The Determinants of Urban Households' Transport Decisions: A Microeconometric Study using Irish Data," Royal Economic Society Annual Conference 2002 150, Royal Economic Society.
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    10. Thobani, Mateen, 1984. "A nested logit model of travel mode to work and auto ownership," Journal of Urban Economics, Elsevier, vol. 15(3), pages 287-301, May.
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    12. 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.
    13. McCarthy, Patrick S, 1996. "Market Price and Income Elasticities of New Vehicles Demand," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 543-47, August.
    14. Kayser, Hilke A., 2000. "Gasoline demand and car choice: estimating gasoline demand using household information," Energy Economics, Elsevier, vol. 22(3), pages 331-348, June.
    15. Dargay, Joyce M, 2001. "The effect of income on car ownership: evidence of asymmetry," Transportation Research Part A: Policy and Practice, Elsevier, vol. 35(9), pages 807-821, November.
    16. Bhat, Chandra R. & Pulugurta, Vamsi, 1998. "A comparison of two alternative behavioral choice mechanisms for household auto ownership decisions," Transportation Research Part B: Methodological, Elsevier, vol. 32(1), pages 61-75, January.
    17. Hugh Hennessy & Richard S. J. Tol, 2011. "The Impact of Government Policy on Private Car Ownership in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 42(2), pages 135–157.
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