Millennials and car ownership: Less money, fewer cars

Americans are driving less. The changes are most pronounced among Millennials, those born in the 1980s and 1990s. Much ink has been spilled debating whether these changes in travel behavior are due to changing preferences or economic circumstances. In this paper, we use eight waves of data from the Panel Study of Income Dynamics (PSID) to examine recent changes in auto ownership among US families with a particular focus on Millennials. We find that today's young adults do own fewer cars than previous generations did when they were young. However, when we control for whether young adults have become economically independent from their parents, i.e. left the nest, we find that economically independent young adults own slightly more cars than we would expect, given their low incomes and wealth. We caution planners to temper their enthusiasm about “peak car,” as this may largely be a manifestation of economic factors that could reverse in coming years.