Dynamic Models of Car Ownership a the Household Level

Abstract

This article reports on a study of panel data on car ownership at the household level, with the goal of describing the level of persistence over time in car ownership, covering a period from 1992 to 2001. The models used estimate separate car ownership models for households with one adult (single males and single females) and households with two adults (couples). The authors describe these models, and present their estimation results, including estimates of average levels of state dependence and elasticities with respect to income and car cost. The descriptive analysis of the change in car ownership shows strong persistence over time. For example, only 24% of couples with zero or one car changed car ownership status over the ten year period. Of these 24%, only one change into or out of car ownership was typically observed for each household. Change in income appears to have very limited impact on car ownership levels in the short run. In addition, state dependence indicates that car ownership only adjusts slowly over time to policy changes; thus, it is difficult to use policy instruments to reduce car ownership in the short run.