Scandinavian Working Papers in Economics
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CTS - Centre for Transport Studies Stockholm (KTH and VTI)
CTS - Centre for Transport Studies Stockholm (KTH and VTI) CTS - Centre for Transport Studies Stockholm (KTH and VTI)
Working papers in Transport Economics

No 2016:13:
Explaining “peak car” with economic variables

Anne Bastian (), Maria Börjesson () and Jonas Eliasson ()

Abstract: Many western countries have seen a plateau and subsequent decrease of car travel during the 21st century. What has generated particular interest and debate is the statement that the development cannot be explained by changes in traditional explanatory factors such as GDP and fuel prices. Instead, it has been argued, the observed trends are indications of substantial changes in lifestyles, preferences and attitudes to car travel; what we are experiencing is not just a temporary plateau, but a true “peak car”. However, this study shows that the traditional variables GDP and fuel price are in fact enough to explain the observed trends in car traffic in all the countries included in our study: the United States, France, the United Kingdom, Sweden and (to a large extent) Australia and Germany. We argue that the importance of the fuel price increases in the early 2000’s has been underappreciated in the studies that shaped the later debate. Results also indicate that GDP elasticities tend to decrease with rising GDP, and that fuel price elasticities tend to increase at high price levels and during periods of rapid price increases.

Keywords: Peak car; Fuel price elasticity; GDP elasticity; Travel demand; (follow links to similar papers)

JEL-Codes: D61; H54; R41; R42; R48; (follow links to similar papers)

24 pages, April 19, 2016

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This paper is published as:
Bastian, Anne, Maria Börjesson and Jonas Eliasson, (2016), 'Explaining “peak car” with economic variables', Transportation Research A, Vol. 88, pages 236-250

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