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Abstract
We develop a model for the joint determination of private car ownership and private car use by households. To own a private car is not worth the cost unless permanent annual mileage exceeds a certain minimum; observed annual mileage however differs from permanent mileage because of transitory factors. This model calls for a nonzero Tobin threshold and for an unusual distribution of the disturbances. We estimate its parameters from the 1980 Dutch household budget survey and obtain satisfactory results. The threshold is about 7500 kilometers per year, and the overall income elasticity of mileage 0 .5 . We also estimate a variable threshold model. In this case the overall income elasticity is slightly higher. The estimates of the variable threshold model confirm the old idea which says that the higher incomes will have a lower threshold.