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It's the economy, stupid: increasing fuel price is enough to explain Peak Car in Sweden

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Abstract

It has long been well-known that economic variables such as GDP and fuel price as well as socio-demographic characteristics and spatial distribution are key factors explaining car use trends. However, due to the recently observed plateau of total car travel in many high income countries, it has been argued that other factors, such as changes in preferences, attitudes and life-styles, have become more important drivers of car use. This would imply that traditional variables are no longer enough for explaining car travel trends. However, in this paper we show that economic variables alone can explain the observed car use trends in Sweden 2002-2012. We also find that urban populations, in particular those with low incomes, respond stronger to fuel price increases and economic downturn, i.e. are reducing car travel more. Among high income urban populations, however, we find signs of saturation in car ownership and distances driven. This underscores the importance of accounting for differences in accessibility with other travel modes and income distribution when explaining the Peak Car phenomenon.

Suggested Citation

  • Bastian, Anne & Börjesson, Maria, 2014. "It's the economy, stupid: increasing fuel price is enough to explain Peak Car in Sweden," Working papers in Transport Economics 2014:15, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    • Handle: RePEc:hhs:ctswps:2014_015
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    More about this item

    Keywords

    Peak Car; Fuel price elasticity; Transport model; Urban car travel;
    All these keywords.

    JEL classification:

    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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