Changes in the structure of car ownership in Spain

This paper analyses the factors determining the growth in car ownership in Spain over the last two decades. A discrete choice model is estimated at three points in time: 1980, 1990 and 2000. The paper compares the two alternative decision mechanisms used for modelling car ownership: ordered-response versus unordered-response mechanisms and concludes that on the basis of forecasting performance, the multinomial logit model and the ordered probit model are almost undistinguishable. The empirical results show that income elasticity is not constant and declines as car ownership increases. Besides, households living in rural areas are less income sensitive than those living in urban areas. Car ownership is also sensitive to the quality of public transport for those living in the largest cities. The results also confirm the existence of a generation effect, which will vanish around the year 2020, a weak life-cycle effect, and a positive effect of employment on the number of cars per household. Finally, the change in the estimated coefficients over time reflects an increase in mobility needs and, consequently, an increase in car ownership. The study also quantifies the relative importance of each explanatory factor to car ownership growth.