Car Ownership Dynamics Seen Through the Follow-Up of Cohorts: Comparison of France and the United Kingdom

Abstract

The dynamics of car ownership based on age-cohort data constructed from repeated cross-section surveys is investigated for France and the United Kingdom, both nationally and for different geographic areas. Two different modeling strategies are used: a demographic approach and a dynamic econometric approach. The demographic approach is primarily oriented toward long-term forecasting. It takes into account changes in car ownership over the life cycle for each generation, differences between generations, and period effects explained by income and prices. The dynamic econometric approach is mainly concerned with estimating the elasticity of car ownership with respect to income and prices in the short and long run. It is based on a dynamic model in which household car ownership is specified as a function of income, prices, sociodemographic factors, and previous car ownership. The results using the two approaches are quite similar. The income elasticity is significantly higher in the United Kingdom than in France, is higher in rural than in urban areas, and decreases over time as car ownership increases. Generation gaps, which have been important between older generations, are not significant for households whose head was born after the 1940s, which implies that the diffusion of car ownership over generations is nearing completion. In addition, a declining income elasticity confirms a progressive evolution toward saturation. Finally, car ownership is considerably more sensitive to car purchase prices than to gasoline prices and both appear to be more significant in densely populated zones than in rural areas.