The impact of fixed and variable costs on household car ownership
Last modified: 17 March 2009
Abstract
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The car purchase tax in The Netherlands is one of the highest in Europe. The Dutch government plans to abolish this tax when national road user charging will be introduced in 2012. Given that without the purchase tax, the prices of new and second hand cars might drop by up to 30%, removing this tax is likely to lead to an increase in car ownership. But consumers could also refrain from buying extra cars when they consider the extra operating costs that will include the kilometre charge. Little is known about the impact of such big changes on car ownership. There are also few studies that include the effects of both fixed and variable car costs on both car ownership and use. This paper present the design of a survey among Dutch households that includes stated intentions and stated preference experiments about car ownership and vehicle type choice, and questions about current and future car ownership and use. It also presents estimation and application results (e.g. elasticities) for models explaining the number of cars in the household and annual car kilometrage. We investigate whether households react more to present one-off fixed costs than to recurrent variable costs, for various specifications of car costs.
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