DEMAND FOR CAR OWNERSHIP AND CAR USE IN DENMARK: A MICRO ECONOMETRIC MODEL

Abstract

This paper describes a micro-econometric analysis of the demand for car ownership and use in Denmark. Following de Jong (1990), the demand for car ownership was estimated in a random utility framework, where the utility of car ownership is derived from the demand for car use. Car ownership and use were estimated jointly taking into account the fixed and variable costs in the budget restriction. The model was estimated with data for 6252 Danish households. As expected, increasing variable costs reduce car use but it appears that variable costs affect transport demand primarily by reducing car ownership. A high elasticity of car use with respect to fixed costs was found. This partly reflects that if fixed costs are high then the elasticity with respect to fixed costs will also generally be high.

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