The effect of prices and income on car travel in the UK

The objective of this paper is to analyse the factors determining household car travel, and specifically the effects of household income and the prices of cars and motor fuels, and to explore the intertemporal pattern of adjustment. The question of asymmetry in the response to rising and falling income is also addressed. Such asymmetry may be caused by habit or resistance to change or the tendency to acquire habits to consume more easily than to abandon them. The impact of prices, the speed of adjustment and the resistance to change will be important in determining the possibility of influencing travel behaviour and specifically car use. The study utilises repeated cross-section data from the annual UK Family Expenditure Surveys and employs a pseudo-panel methodology. The results are compared with those for car ownership estimated on the basis of similar models.