Analysis of Variations in Vehicle Ownership Expenditures

Abstract

There is significant concern about the high cost of vehicle ownership, although several authors have acknowledged in the literature that owning and operating a vehicle have accessibility benefits. This paper uses Consumer Expenditure Survey data to explore vehicle ownership expenditures of American households. Differences in vehicle ownership expenditures among urban and rural households are estimated in different regions of the United States, controlling for socioeconomic, demographic, life cycle, and other household factors. First, patterns in vehicle ownership expenses are examined over a year. Three models of expenditures for vehicle ownership are estimated: the first model is estimated by ordinary least squares, the second is a Tobit model estimated to take into account zero expenditures on vehicles by a segment of households during the survey year, and the third model is a two-stage sample selection model that explicitly models first the household vehicle ownership decision and then, given that first decision, the expenditure intensity decision for the subsample of households that own vehicles. It was found that locational and regional effects were not constant but that urban–rural differences depended on region, and differences among regions depended on whether a household was located in an urban or a rural area.