An Indirect Utility Model of Multiple Car Ownership and Use

Tinbergen Institute Discussion Paper No. TI 04-085/3

31 Pages Posted: 25 Aug 2004

See all articles by Jan Rouwendal

Jan Rouwendal

VU University Amsterdam - Department of Spatial Economics; Tinbergen Institute

John Pommer

Connekt

Date Written: July 28, 2004

Abstract

The number of households with two or more cars is steadily increasing over time. The reason is that ownership of a single car imposes restrictions on car use when there are multiple license holders in a household. If such restrictions are severe, the benefits of multiple-car ownership may exceed the additional costs involved. In this paper, we develop a model that is based on the idea that limited substitutability between car use of different drivers is the driving force behind multiple-car ownership. We formulate a model structure in which households can own and use multiple cars. This approach is used to generalize an existing model for ownership and use of a single car two multiple car ownership and use. The extended model is estimated on Dutch data concerning households with one or two cars. An application to the effects of shifting the burden of car taxes from fixed to variable costs is provided.

Keywords: Automobile demand, multiple car ownership, demand for car kilometers

JEL Classification: R41, D13

Suggested Citation

Rouwendal, Jan and Pommer, John, An Indirect Utility Model of Multiple Car Ownership and Use (July 28, 2004). Tinbergen Institute Discussion Paper No. TI 04-085/3, Available at SSRN: https://ssrn.com/abstract=581321 or http://dx.doi.org/10.2139/ssrn.581321

Jan Rouwendal (Contact Author)

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

John Pommer

Connekt ( email )

P.O. Box 48
NL-2600 AA Delft
Netherlands

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