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

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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