Car Demand Forecasting Using Dynamic Pseudo Panel Model

Biao Huang 1 MVA and Department of Economics, Birkbeck College 1. INTRODUCTION The forecasts of car ownership and use play a central role in the planning and decision making of numerous public agencies and private organisations. It has been a lively area of research and numerous models have been constructed. The international literature review reveals that the static approach dominates car ownership forecast (see, for example, NRTF, 1997; Whelan, 2001; Hensher et al., 1989; Brownstone et al., 2000; De Jong, 1989a, 1989b). It is envisaged that the inclusion of the dynamic in car demand forecasting will yield fruitful results. Nevertheless, the use of dynamic approach in car demand forecasting is still limited due to heavy data requirement. There have been relatively few forecasting models that use the dynamic approach except some using aggregate time series methods. It is possible to forecast car demand using panel data model. However, there is only one panel survey in Britain containing limited transport related information: the British Household Panel Survey (BHPS), which is inadequate for the purpose of our study 2. Furthermore, due to the attrition problem, the size and representativeness of the samples decline over time, rendering the panel data inferior to other national cross-sectional data. One approach to circumvent the need for panel data is to construct pseudo panels from the cross sectional data. The pseudo-panel approach is a relatively new econometric approach to estimate dynamic demand models. It is based on grouping individuals or households into cohorts and thus treating the averages within these cohorts as observations in a panel. In this way, it enables us to follow over time a representative sample of the same cohorts of individuals or households and to overcome the deficiencies in both the static models and aggregate time series. In most empirical studies, the authors would impose certain restrictions on pseudo-panel before treating them as actual panel data, although it has been shown that the undesirable effects of applying only a synthetic panel would be small if the cohort sizes are sufficient large (more than 100 individuals) and if the true means within each cohort exhibit sufficient time variation (Verbeek and Nijman, 1992). The use of pseudo panel data was introduced by Deaton (1985) for the analysis of consumer demand systems. The pseudo panel approach has since been applied not only in microeconomics research, such as study of income and saving (see, for example, Beach and Finnie 2004; Bourguignon et al, 2004; Baldini and Mazzaferro, 1999), but also in many areas of social science research, including health, education, employment, housing, etc. (e.g. Garner et al., 2002; Glied, 2002; Lauer, 2003; Anderson and Hussey, 2000; Weir, 2003; Campbell and Cocoo, 2005). In the transport field, Dargay and

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Vythoulkas (1999) was the first study of dynamic car ownership model using pseudo panel approach. The main contribution of the current paper lies in the extension of pseudo panel method to non-linear models, where it is possible to incorporate the effect of saturation. More specifically, the following models were estimated: standard logit model based on proportions data; dynamic mixed logit model; dynamic mixed logit model with saturation. All models have good level of fit and the forecast performance is very satisfactory. This paper is organized as follows: section two discusses the construction of the pseudo panel and presents the descriptive statistics of selected variables; section three describes three non-linear models and the results of estimation; section four reports the forecasts of private car ownership in Great Britain to 2021 and evaluates the model performance; section five is a brief conclusion. 2. PSEUDO PANEL DATA The motivation to use the pseudo panel model is to take advantage of the high quality cross sectional survey data available in the UK. Among the several national surveys containing transport related information, the longest running and most comprehensive one is the Family Expenditure Survey (FES). The FES is a voluntary survey of a random sample of private households in the United Kingdom carried out by the Office for National Statistics. It is a continuous survey with an annual sample of around 6,500 households. It ran from 1957 to 2001, until it was merged with the National Food Survey to form a new Expenditure and Food Survey. Data is collected throughout the year to cover seasonal variations in expenditures. The FES contains rich data on expenditure and income, including vehicle purchasing and servicing costs data. It also collects information on socio-economic characteristics of the households, e.g. composition, size, social class, occupation and age of the head of household. Many of these variables have been identified as the main factors influencing car ownership 2.1 Constructing the Pseudo Panel To compile a pseudo panel dataset, the cohorts should be defined on the basis of common shared characteristics. Such characteristics should be time invariant, such as year of birth of the head of the household, education level, geographic region, etc (Dargay and Vythoulkas, 1999). In the current study, the cohort is defined based on the year of birth of the head of the household. The choice of the width of the birth cohort is a trade off between the need to have a large number of observations per cohort and the desire to have as much as informative data as possible. The narrower the birth cohort the greater number of birth cohorts and hence the number of data points; on the other hand, this would imply the fewer number of observations per cohort, hence the greater the potential error in estimating the cohort mean (Propper et al. 2001). The birth cohort is defined in a five-year band in the current study. For example, all the households with its head born between 1901 and 1905 are grouped into a cohort. In 1982, the mean age of household head within this
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cohort is 79; in 1983, this mean age is 80; in 1984, this mean age is 81, and so on. Likewise, for each sampling year, all the households with its head born between 1906 and 1910 are grouped into a cohort; and for those born between 1911 and 1915, and so on. The objective of such grouping is to track the notionally same group of people. Table A.1 in the Appendix shows the mean age of all the cohorts constructed in this study. It should be noted that only cohorts with more than 100 observations are included. Furthermore, the FES survey year changed from calendar year to fiscal year since 1994. Since this will have an impact on the age of the household head, adjustment has been made to allocate each observation into calendar year based on the data collection year. The final wave of the FES data is for year 2000/2001. However, only data for year 2000 are used as there are only a few hundred observations for 2001. In total, the constructed pseudo panel has 254 observations, covering 19 years from 1982 to 2000. 2.2 Descriptive Statistics of the Pseudo Panel The pseudo panel data set contains 17 primary variables directly derived from the FES. They fall into five categories. Table 2.1 summarizes these variables. Table 2-1 Variables in the Pseudo Panel Dataset Variable Number of cars owned by Household Number of cars owned or Used by Household Percentage of household owning at least one car Percentage of household owning two or more cars Average weekly public transport expenditure per person Weekly household income Weekly household disposable income Weekly household expenditure Household size Number of adult Number of worker Percentage of household living in metropolitan area Percentage of household living in rural area Year Birth Cohort Number of observations within cohort Category Transport data

Household income and expenditure data Household demographic data Residence area data General data

Some of the variables show strong trends across time and cohorts. For example, the household size increases as the age of the household head increases up to around 40, and then starts its steady decline. Similarly, the average household income reaches its peak when its head is in his late 40s. In this section, two selected variables, household car ownership and real disposable income, will be discussed in further details to reveal the particular time and cohort effects. On the other hand, residence area data are more or less random across cohorts. Regarding percentage of household living in metropolitan area, it varies between 22.0% and 51.4%; regarding percentage of household living in rural area, it varies between 10.2% and 33.7%.
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2.2.1 Number of Cars Owned or Used by the Household The pseudo panel data clearly show the difference of car ownership between cohorts and between years. Figure 2.1 compares the number of cars owned or used by different household cohorts in 1982 and 2000. For a given year, the car ownership is the highest for the cohort whose household head is in late 40s. In 1982, the cohort with the highest car ownership was the one with head of household born between 1931 and 1935, i.e. aged between 47 and 51. The average number of car owned or used was 1.11. In 2000, the cohort with the highest car ownership was the one with household head born between 1951 and 1955, i.e. aged between 45 and 49. The number of cars owned or used by that cohort was 1.38, significantly higher than that of the comparable cohort in 1982. Figure 2-1 2000 Number of Cars Owned or Used by Household, 1982 and

Car Owned or Used by Household, Comparison by Year

1.40 1.20 1.00 0.80 0.60 0.40 0.20
30 50 05 40 45 55 15 25 10 20 60 35 65 70 26 36 01 11 21 31 41 46 51 06 16 56 75 19 71 61 66 76 80

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Birth Cohort
1982 2000

Figure 2.2 compares the car ownership of eight cohorts. Over the sample period, each cohort sees its household head getting older year by year. Hence, between 1982 and 2000, the mean age of household head in these eight cohorts covers different ranges, although there are overlaps between these ranges. By plotting the number of cars owned against the mean age of the household head, we are able to make some sensible comparison between these eight cohorts. There are two apparent trends. First, by combining all the eight cohorts, the trend shows that car ownership rises and falls according to the age of household head, with the peak of 1.42 cars per household when the head is 48 years old. Second, by comparing the car ownership figures of the adjacent cohorts, the trend shows that for any given age, the cohort with younger household head tends to have higher car ownership. These two trends were referred as life cycle effect and generation effect in Dargay and Vythoulkas (1999). They also found that the difference amongst generations appeared to
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19

be declining for the most recent regenerations. Using more recent data (19822000 as opposed to the 1974-1994 data used by Dargay and Vythoulkas), the current study found that this diminishing generation effect is more apparent. Figure 2-2 Number of Cars Owned or Used by Household, comparison of eight cohorts
Number of Cars Owned or Used by Household, Comparison by Cohorts
1.40 1.20 1.00 0.80 0.60 0.40 0.20 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 Age of Household Head
1901-05 1911-15 1921-25 1931-35 1941-45 1951-55 1961-65 1971-75

2.2.2 Weekly Household Disposable Income The weekly household disposable income also shows a strong trend across cohorts. First, we compared the difference of household income across birth cohorts for 1982 and 2000 (Figure 2.3). It shows that for young and mid-aged household, cohorts with older head have higher disposable income; for older household, cohorts with older head have lower disposable income. This trend is very similar to that of car ownership, suggesting that car ownership is highly correlated to income level. Figure 2-3 Household Weekly Disposable Income, 1982 and 2000
Household Weekly Dispensable Income ( in 1995 price), Comparison by Year
500 450 400 350 300 250 200 150 100

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1982 2000

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Figure 2.3 also shows the rise of income level for corresponding age group from 1982 to 2000 (all the expenditure and income data in the pseudo panel dataset have been converted to 1995 prices based on Retail Price Index). It is revealing to track the change of household income level according to the age of household head for the eight selected cohorts. Figure 2.4 shows that weekly household disposable income rises as the age of household head increases and reaches its peak when the household head is in late 40s. For the cohort whose household head is born between 1941 and 1945, the weekly disposable income is the highest of 490 when its household head is aged 47. Figure 2-4 Household Weekly Disposable Income, Eight Cohorts
Household Weekly Dispensable Income ( in 1995 price), Comparison by Cohorts

500 450 400 350 300 250 200 150 100

19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 Age of Household Head

1901-05 1911-15 1921-25 1931-35 1941-45 1951-55 1961-65 1971-75

3. NONLINEAR MODELLING The main advantage of estimating non-linear models is the possibility to include the saturation level. By specifying car ownership models with an Sshape functional form and a saturation level, forecasts of vehicle ownership will be curtailed as saturation is approached. Although probably not being significant in developing countries, this feature would be highly significant to forecasts in more mature markets such as Great Britain (Whelan et al, 2000). This section discusses three nonlinear models, starting from a static model, then dynamic model with and without saturation. 3.1 Static Logit Model based on Proportions Data As the pseudo panel data set was the aggregation of the individual choice data, we start from the standard binary choice model. For models with discrete dependent variable, the outcome of discrete choice can be seen as a reflection of an underlying regression. Assuming that each individual (household) makes marginal cost-benefit calculation of owning a car, the difference between benefit and costs can be modelled as an unobserved variable y*, and y* becomes dependent variable of a linear model:
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y* = x +

(1)

As we do not directly observe the net benefit of owning a car, the observation we have is whether a household has car or not: y = 1 if y* > 0, y = 0 if y* < 0; Then the probability of y equals one is: Prob (y = 1 | x) = Prob (y* >0 | x) = Prob ( < x | x) Assuming that follows a logistic distribution, it gives the familiar logit model: exp(x' ) Prob (y = 1 | x) = (2) 1 + exp(x' ) The current study follows NRTF (1997) and separately estimates models of household with one or more cars and household with two or more cars. The dependent variable is expressed as the proportion of households owning at least one car in a cohort (R1+) and the proportion of households owing two or more cars, conditional on ownership of at least one car (R2+|1+) 3. These variables have the property that they generally increase monotonically as a function of income and other variables of household characteristics. The estimation of standard logit model based on aggregate data is relatively straight forward and can be done using standard econometric software such as Limdep. The log likelihood function is derived here, as it will be required by the estimation of more complex logit model, such as mixed logit and logit with saturation level, which will be discussed in the following sections. Let ni be the number of household for cohort i, and N be the total number of cohorts. Let ci be the number of household owning at least one car for that cohort (the same applied to household owning two or more cars). Further define ri = ci / ni, the proportion of household owning at least one car within cohort. Then, the likelihood function is as follows:

L = ( Pi ) ci (1 Pi ) ni ci = [( Pi ) ri (1 Pi )1 ri ] ni
i =1 i =1

(3)

where Pi is the probability of an average household in cohort i owning at least one car, as defined by equation (2). Taking logarithm of expression (3) we have derived the log likelihood function of logit model based on aggregate data:

ln( L) = ni [ri ln( Pi ) + (1 ri ) ln(1 Pi )]

i =1

(4)

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The logit model is estimated using maximum likelihood in GAUSS. Following the general to specific modelling approach, the initial model includes nine explanatory variables. For model of one plus car (dependent variable R1+), all but three variables, MET, RURAL and LNMCOST, are significant at 1% level. Table 3.1 describes the explanatory variables included in the model. Table 3-1 Description of explanatory variables Variable Description LNINC Log of Household disposable income (1995 price) HHSIZE Household Size WORKER Number of employed person in the household LNAGE Log of Age of household head LNMCOST Log of index of real motoring costs (All costs, GB*) MET Proportion of households living in Metropolitan area RURAL Proportion of households living in rural area Dummy variable for "young" household, whose head is younger AGEDUMMY than 50 (* Source: Transport Trends, 2004) Consequently, a reduced model with six variables was re-estimated. The loglikelihood of the reduced model is -70290.4. As the log-likelihood of the full model is -70287.4, the hypothesis that the reduced model is as good as the full model is not rejected. Similar model was estimated for model of conditional two plus car (dependent variable R2+|1+). AGEDUMMY was not significant for the R2+|1+ model and was thus omitted. Table 3.2 presents the results of the model of one plus car and that of conditional two plus cars. Table 3-2 Modeling results of Car1+ and Car2+|1+ (t-statistic in parentheses) R1+ R2+|1+ Constant LNINC -11.827 2.317 (-42.855) (42.832) -13.293 (-46.543) HHSIZE 0.392 (13.889) WORKER LNAGE AGEDUMMY -0.450 -0.206 -0.378 (-13.367) (-5.267) (-10.045) 0.277 (8.880) 0.052 (2.043)

2.172 -0.301 (38.203) (-15.510)

Besides the constant, LNINC is the most significant explanatory variable, whose parameter is a large positive value. This suggests that the increase of average household disposable income has significant and positive impacts on the proportion of car owning household in a cohort. Due to the interaction between the explanatory variables, it is difficult to directly interpret the impact of other variables. 3.2 Dynamic Pseudo Panel Model Using pseudo panel data rather than cross sectional data enables us to investigate the dynamic of the car demand. A random or fixed effects model which explicitly allows for lagged effects would be: yit = 1(xit + i + yi,t-1 + it > 0) (5)

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Lagged effects in a binary choice setting can arise from three sources: serial correction in it, the heterogeneity, i, or true state dependence through the term yi,t-1. As modelling dynamic effects in binary choice models is more complex than in the linear model, by comparison there are relatively fewer firm results in the applied literature (Green, 2003). Traditionally, the focus is on the methods of avoiding the strong parametric assumptions of the probit and logit models. A different approach is taken in the current study, i.e. the method of Maximum Simulated Likelihood. The use of simulation enables the estimation of a highly flexible model, mixed logit model. Mixed logit alleviates the three limitation of standard logit by allowing for random taste variation, unrestricted substitution patterns and correlation in unobserved factors over time (Train, 2003). In recent years, mixed logit model has been applied to many empirical studies based on panel data (see, for example, Revelt and Train, 1998; Bhat, 2000) as well as cross sectional data (e.g. Bhat, 1998; Browstone and Train, 1999). This study is the first application of mixed logit model in the pseudo panel setting. Mixed logit probabilities are the integrals of standard logit probabilities over a density of parameters. The choice probabilities of a mixed logit model can be expressed as the followings:

Pi = pi ( ) f ( | )d

(6)

where pi() is the logit probability evaluated at (for binary choice model this is defined by equation 1) and f(|) is the density function of , whose parameters are denoted as . The method of Maximum Simulated Likelihood is based on the simulated probability of (6):
Pi =
~

1 D pi ( d ) D d =1

(7)

where d is a value of from the dth draw of f(|) and D is the number of draws. By construction, P i is an unbiased estimated of Pi. Inserting the simulated probability into the log likelihood function of binary choice model based on aggregate data (4), it gives a simulated log likelihood function:
SLL = ni [ri ln( P i ) + (1 ri ) ln(1 P i )]
i =1 N

(8)

Thanks to the flexibility of the mixed logit model, it is straight forward to extend it to pseudo panel data. Assuming that the coefficients in the latent regression vary over people 4 but stay constant over time, equation (1) can be written as
y it * = xit '+ it

(9)

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with it being iid (independent identically distributed) extreme value over time and people. Conditional on the probability of a person makes a sequence of choices over T periods is the products of logit formulas:
pit ( ) = exp( xit ' ) t =1 1 + exp( x it ' )
T

(10)

since its are independent over time. The unconditional probability is the integral of this product over all values of :
Pit = pit ( ) f ( )d

(11)

As the only difference of mixed logit with repeated choices is that the integrand involves a product of logit formulas, the probability is simulated similarly to the probability with one choice period. Lagged dependent variables can be added in the mixed logit model in a given period to represent lagged response behaviour without changing the estimation procedure (Train, 2003). Conditional on n, the only remaining random terms in the mixed logit are the its, which are independent over time. A lagged dependent variable entering yit* is uncorrelated with these remaining error terms for period t, since these terms are independent over time. The conditional probabilities are therefore the same as in equation (10), but with the xs including lagged dependent variables, and the unconditional probability is the integral of this conditional probability over all values of (equation 11). Extending the static models in Table 3.2 to include a lagged dependent variable yields a dynamic pseudo panel model. It is assumed that parameter vector follows a multivariate normal distribution 5. The model was estimated using the method of Maximum Simulated Likelihood in Gauss. For both models (R1+ and R2+|1+), the means of most parameters in are statistically significant at 1% level. However, the standard deviations of all parameters in are close to zero and none is significant 6, which seems to suggest that after the data have been aggregated in a pseudo panel, heterogeneity across cohorts becomes insignificant. Table 3-3 Results of dynamic pseudo panel model for Car1+ and Car2+|1+ (t-statistic in parentheses)
Mean R1+ Std Dv Constant -6.0930 (-14.4190) 0.0004 (0.0580) -5.5335 (-11.2000) 0.0004 (0.0590) LNINC 1.0131 (11.2280) 0.0001 (0.0580) 0.7434 (7.9260) 0.0000 (0.0070) HHSIZE 0.1529 (4.6780) 0.0001 (0.0340) -0.0168 (-0.5390) 0.0000 (0.0160) WORKER -0.1712 (-4.3350) 0.0001 (0.0260) 0.0692 (1.8890) 0.0001 (0.0160) LNAGE -0.1697 (-4.0860) 0.0000 (0.0290) -0.1982 (-4.7990) 0.0000 (0.0180) AGEDUMMY -0.1454 (-3.5530) 0.0003 (0.0290) -0.0574 (-1.6930) 0.0006 (0.0650) LagY 2.5073 (19.3560) 0.0006 (0.0630) 3.5338 (22.0000) 0.0008 (0.0370)

Mean R2+|1+ Std Dv

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Table 3.3 shows the estimated means and standard deviations of the parameter for model of one plus car and that of conditional two plus cars. The lagged dependent variable is highly significant, suggesting that the proportion of households owning cars in a cohort in one year is strongly influenced by that proportion in the previous year. The model also indicates that household disposable income has most significant impact on car ownership among all independent variables (except for the constant term). Evaluated at the means of the regressors, the income elasticity 7 is 0.312 for households owning at least one car and 0.468 for those owning two plus cars given ownership of one car. The log likelihood for the R1+ and R2+|1+ is -66085 and -64999 respectively. Due to the non-linear specification of the model, it is not possible to directly obtain the long run income elasticity. Hence, this study uses linear Taylor approximation to transform the long run equilibrium equation. The expansion points are the weighted average value of R1+ and R2+|1+ respectively ( R1+ = 0.711 ; R2+ = 0.277 ). Evaluated at the chosen expansion point and the means of the regressors, the long run income elasticity is 0.618 for R1+ and 0.837 for R2+|1+. This implies that the long run elasticity for households owning at least one car is about double the one in the short run, while for multi-car households the long run elasticity is about 80% higher than that in the short run. Note that this difference is not as big as reported in Dargay and Vythoulkas (1999), where the long run income elasticity is about three time of the short run one. 3.3 Dynamic Model with Saturation Level In car ownership forecast model, saturation is an important concept. It is a limit on the choices faced by decision maker, which may be reached by not exceeded. A model with saturation level explicitly assumes that increasing income will bring car ownership levels closer to but never in excess of a saturation limit. Similar models that restrict range of possible choice fractions have been used under the name of DOGIT. While well established, however, there have been problems with estimating these saturation models. In the current study, attempt to directly estimate the following model failed miserably:

Pi =

S exp( x' ) 1 + exp( x' )

(12)

where S is the saturation level. However, after a bit of manipulation, it is possible to transform S into a linear term in the exponential function. Rewrite equation (12) to:

Pi =

exp( x' ) 1 S [1 + exp( x' )] (1 + ) S

exp( x' ) S [1 + exp( x' )] [1 + exp( ln )] 1+ S

(13)

Note: S * = ln

S 1+ S

(14)
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Then, Pi =

exp( x' ) 1 + exp( x' ) + exp( x' S * ) + exp( S * )

(15)

Instead of directly estimating S, we now estimate a linear term S* in the exponential function. One advantage of this formulation is that implicitly constrains S within the range of zero and one. It should be noted that equation (15) is equivalent to the choice probability function of the nested logit model proposed by Daly (1999) and Whelan et al. (2000). Assuming follows multivariate normal distribution, expression (15) can be simulated in the same manner as (6). The simulated probability is inserted in log likelihood function (4), which enables the model to be estimated by similar Gauss routine. Table 3.4 presents the results for the model of R1+ and R2+|1+. Table 3-4 Results of dynamic pseudo panel model with saturation level (t-statistic in parentheses)
Constant Mean R1+ Std Dv -8.2544 (-9.5190) 0.0001 (0.0110) -5.5842 (-9.2090) 0.0002 (0.0160) LNINC 1.3945 (8.5480) 0.0000 (0.0010) 0.7730 (6.3590) 0.0002 (0.0850) HHSIZE 0.2415 (4.4400) 0.0004 (0.1050) -0.0742 (-2.2330) 0.0001 (0.0400) WORKER -0.2262 (-4.1280) 0.0008 (0.1090) 0.1252 (2.4330) 0.0006 (0.0880) LNAGE -0.1317 (-2.2610) 0.0001 (0.0410) -0.1294 (-3.3900) 0.0003 (0.1170) AGEDUMMY -0.1725 (-2.9860) 0.0006 (0.0490) LagY 2.5309 (16.3860) 0.0006 (0.0530) 5.4581 (16.5520) 0.0061 (0.1800) N.A. N.A. 0.4120 (4.6000) S
*

2.5759 (10.3420)

Mean R2+|1+ Std Dv

For both models, the means of most parameters in vector are significant at 1% level (AGEDUMMY is not significant for the R2+|1+ model and is thus omitted). None of the standard deviations of is significant. The log likelihood for R1+ is -66079, while that for R2+|1+ is -64967. Compared to models without saturation level (Table 3.3), this represents an increase of log likelihood of 6 and 32 respectively. As the 5% critical value of a chi-squared statistic with one degree of freedom is 3.84, it suggests that the explanatory power of the models increase after the saturation level is included. This result is particularly significant for model of R2+|1+, as the saturation level for R2+|1+ is substantially lower than one. From equation (14), it is easy to derive the saturation level S based on the estimated S*:

S=

exp(S * ) 1 + exp(S * )

(16)

which gives a saturation level of 0.929 for households owning at least one car and that of 0.602 for households owning more cars conditional on ownership of the first one.
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4. CAR DEMAND FORECAST AND EVALUATION After a robust model is estimated, the next step is to apply the model in demand forecast. Due to data availability problem, the geographic area covered is limited to Great Britain only (as opposed to the United Kingdom), and the forecast horizon is between year 2001 and 2021. As the model is estimated using pseudo panel data, the common problem of aggregation bias in models based on individual data can be avoided. However, there are two important issues need to be resolved in the pseudo panel setting. The first is the treatment of new cohorts. The second is the separation of cohort effect and time trend effect in the input data. The compiled pseudo panel dataset includes 16 cohorts. The head of the oldest cohort born between 1901 and 1905, while that of the youngest cohort born between 1976 and 1980. Over the forecast horizon, five new cohorts will be introduced, with the youngest whose head is born between 2001 and 2006. For a longer forecast period, there will be more new cohorts. Whether the estimated model is applicable to these new cohorts remains a question. Since the model concerned is a random parameter model and none of the standard deviation of the parameters is significant, it seems to reject the hypotheses of heterogeneity across cohorts. As a result, it can be argued that marginal effects of all explanatory variables remain the same for all cohorts and it would be acceptable to apply the model to the new cohorts. For each of the twenty cohorts 8 over the forecast period, two categories of input data are required: number of households and characteristics of households (household disposable income, household size, number of workers in the household, age of household head). The analysis of cohort characteristic in Section 2 reveals that for pseudo panel data, household characteristic such as income goes through a life cycle peaking at the age of late 40s; furthermore, at a given age, households in younger cohorts tend to have higher income than those in older cohorts. In order to estimate future year input to the model, the current study develops a household sub-model, which includes 81 overlapping age bands and explicitly separates the cohort and time trend effect. The first part of this chapter will describe the household sub-model in further details; the second part will present the forecast results and compare them to the observed data between 2001 and 2004. 4.1 Household sub-model The household sub-model estimates total number of households for each cohort as well as relevant household characteristics, which are input to the car ownership model. The sub-model includes three stages: 1. Estimating the base year 9 figures for four variables (number of household, household disposable income, household size and number of worker) for 81 overlapping age bands of household head, e.g. those aged 15-19, 16-20, 17-2194-98, 95-99. This stage isolates the age effect cross cohorts.

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2. For each of the 81 age band, forecast the future year figure based on standard growth assumption, derived from various sources. This stage introduces the trend effect over time. 3. The first two stages have produced four 81 by 21 matrices (81 age bands by 21 years by 4 variables). Within each matrix, identify the twenty cohorts by the age of the household head. For example, in 2001, age band 16-20 is in effect cohort whose head is born between 1981 and 1985 (Cohort ID F5); age band 21-25 is cohort born between 1976 and 1980 (ID F6). In 2002, it is age band 17-21 that refers to cohort F5 and age band 22-26 refers to cohort F6. Similarly, age band 36-40 refers to cohort F5 and age band 41-45 refers to cohort F6 in 2021. The base year household characteristics data are estimated based on Family Expenditure Survey. The Office of National Statistics product, Focus on Family (ONS, 2005), contains data on the number of families based on the 14 age bands of family reference person in 2001. By further taking into account the number of one person household in different age groups, it is possible to derive the number for household for all cohorts in 2001. The future year growth assumptions are derived from various social economic forecasts. In particular, the assumption on household number growth was obtained from ODPM (1999) and Scottish Executive (2002). The real disposable income is assumed to grow in line with the Gross Domestic Product (GDP), adjusted by the number of household in each cohort. The assumption of GDP growth is obtained from Treasury (2005a; 2005b). 4.2 Car Demand Forecast and Model Performance Evaluation For every year, the total number of cars is estimated by multiplying the total number of households by the proportion of car owning households for each cohort, and summing over all cohorts:

TC t = [ HH it ( P1+ ) it + HH it ( P2 +|1+ ) it ( P1+ ) it ( AC it 1)]

i

where, TCt = Total number of cars in year t; HHit = Total number of household for cohort i in year t; ACit = Average number of cars in multi-car household for cohort i in year t. The base year value of ACi is derived using the Family Expenditure Survey data. Based on FES data, it is assumed that the growth rate of ACi is 0.43% per annum between 2001 and 2006. This growth rate is assumed to decrease for each subsequent five-year period following a simple rational function 10 in order to account for the effect of reduced household size. Table 4.1 shows the assumed average number of cars in multi-car household for six age bands for selected years 11.

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Table 4-1 Average number of cars in multi-car household 2001 2006 2011 2016 2021 16-19 2.009 2.053 2.075 2.082 2.084 20-25 2.029 2.073 2.095 2.103 2.105 25-45 2.163 2.210 2.234 2.242 2.244 45-65 2.306 2.356 2.382 2.390 2.392 65-75 2.071 2.117 2.140 2.147 2.149 75+ 2.009 2.053 2.075 2.082 2.084

P1+ and P2+|1+ are forecasted using the parameters estimated from the car ownership models (see Table 3.4 in the previous section) and output from the household sub-model. Figure 4.1 and 4.2 shows the estimated proportion of household owning at least one car and that of household owing two or more cars (P2+= P1+ *P2+|1+). Both show strong cohort effect and time trend effect. For a given year, the proportion of household owning cars is lower for young and old cohorts and reaches its peak when the household head is aged around 50. The time trend effect is also clear, as at a given age the proportion of car ownership is higher in later years, although the difference becomes smaller when the household head gets older. Finally, it is worth noting that the distribution curve across cohorts becomes much less peaky in 2021 compared to 2001, indicating a strong saturation effect. Table A2 and Table A3 in the appendix present the proportion of car ownership for all cohorts over the forecast period. Figure 4-1 Forecast proportion of household owing at least one car, five selected years
Proportion of household owning at least one car, Comparison by Years
1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0
19 16 -2 0 19 26 -3 0 19 36 -4 0 19 96 -0 0 19 66 -7 0 19 76 -8 0 19 86 -9 0 19 56 -6 0 19 46 -5 0 19 06 -1 0

2001 2006 2011 2016 2021

Birth Cohorts

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Figure 4-2 Forecast proportion of household owing two or more cars, five selected years
Proportion of household owning two or more cars, Comparison by Years
0.5 0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0
19 26 -3 0 19 36 -4 0 19 46 -5 0 19 16 -2 0 19 06 -1 0 19 66 -7 0 19 56 -6 0 19 86 -9 0 19 76 -8 0 19 96 -0 0

2001 2006 2011 2016 2021

Birth Cohorts

As there are four years of car ownership data available in the forecast period (year 2001 to 2004), it is possible to evaluate the model performance by comparing the forecasts to the observed data. By comparing the forecast total number of cars to the total number of private cars currently licensed in Great Britain, our forecasts are higher by between 1.15% and 2.40%. Taking into account the unlicensed car stock, the overall forecast results seem very accurate. Table 4.2 shows the comparison of forecast and actual private car stock in Britain. Table 4-2 Forecast and Actual Private Car Stock in Britain, 2001-2004 Vehicle Licensed a 24,473 23,899 2001 24,868 24,543 2002 25,420 24,985 2003 26,052 25,755 2004 (Source: a DfT, 2005; b DfT, 2004) Total Cars Difference 2.40% 1.33% 1.74% 1.15% Estimated Unlicensed PLG Stock b 4.40% 2.90%

Another evaluation criterion is to compare the forecast proportion of household owning cars to the observed value. However, the data available are the proportion of household with regular use of cars, rather than that of household actually owning cars. A rough comparison shows that our forecasts have higher proportion of household with no cars and lower proportion with two plus cars. As households without car ownership can still have regular access to car use, it appears that the forecasts are consistent with the observed data.

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5. CONCLUSION The paper presents a fresh attempt in car demand forecasting. A pseudo panel dataset was constructed from the UK Family Expenditure Survey covering the period of 1982 to 2000. It enables the estimation of dynamic models and the identification of long run and short run elasticities. It is expected that allowing state dependence over time would improve the performance of the forecasting model. Furthermore, this study introduces a new approach that enables the direct estimation of the saturation level in a dynamic mixed logit model. The estimated saturation levels are highly significant for both models (one plus car and conditional two plus cars). The explanatory power of the models has also been improved after the inclusion of saturation level, especially for that of conditional two plus cars. All these results suggest that it is very important to consider the effects of saturation as an integrated part of any car demand forecasting model. After a robust model has been estimated, this study forecasts the number of cars in Great Britain to year 2021. For the four years with data available, the forecasts results closely match the actual value. Overall, the performance of the forecast model is highly satisfactory. One particular difficulty we have encountered in forecasting is the treatment of new cohorts. It is debatable whether we can treat them in the same way as the existing ones. It is expected that this problem will become more acute if the forecast horizon is extended to 30 or even 50 years, as it becomes more and more uncertain what the choice behaviour of the newer cohorts will be like. The solution here might lie in the consideration of fixed effect and its trend over cohorts, which remain an area of future research.

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Notes: 1. The author would like to thank Prof. Ron Smith for his detailed and constructive comments. 2. Hanly and Dargay (2000) was a good attempt to explore the BHPS. 3. The conditional proportion of household owning two or more cars can be derived using unconditional proportion of household owning two or more cars and at least one car: R2+|1+ = (R2+) / (R1+). 4. In the pseudo panel setting, the decision (choice) maker is the average household in a cohort. 5. Separate models assuming that follows a multivariate uniform distribution and multivariate triangular distribution have been estimated and produced similar results. 6. These estimated standard deviations are for the underlying distribution of the parameter. Noted that ~ f(), and in the current study is defined by the two parameters in vector : mean and standard deviation. 7. = (R ) LNINC , LNINC being log disposable income. Note that for R discrete choice model, marginal effect and elasticity depend on the values of the regressors. 8. The oldest cohort (head born between 1901 and 1906) has been drop in the forecasting. 9. For number of household the base year is 2001, the census year; for household characteristics, the base year is 2000, last year of the Family Expenditure Survey series. 10. It is assumed that the growth rate g=1/x, where x = 2, 3, 4 for the three subsequent five-year periods. 11. To obtain multi-car factor for all cohorts, we follow a process similar to the household sub-model, which involves expanding the future year factors to an 81 by 21 matrix.

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Reference: Anderson, G. F. and Hussey, P. S. (2000), Population Aging: A Comparison among Industrialized Countries, Health Affairs, 19 (3), pp191-204 Baldini, M. and Mazzaferro, C. (1999), Demographic transition and Household Saving in Italy, paper presented to the Bank of Italy Conference Quantitative Research for Political Economy, Perugia, Dec. 1999 Beach, C. M. and Finnie, R. (2004), A Longitudinal Analysis of Earnings Change in Canada, Canadian Journal of Economics, 37 (1), pp219-241 Bhat, C. (1998), Accommodating Variations in Responsiveness to Level-ofService Variables in Travel Mode Choice Models, Transportation Research A, 32, pp455507 Bhat, C. (2000), Incorporating Observed and Unobserved Heterogeneity in Urban Work Mode Choice Modeling, Transportation Science, 34, pp228238 Bourguignon, F., Goh, C. and Kim, D. (2004), Estimating individual vulnerability to poverty with pseudo-panel data, World Bank Policy Research Working Paper 3375 Brownstone, D. and Train, K. (1999), Forecasting New Porduct Penetration with Flexible Substitution Patterns, Journal and Econometrics, 89, pp109-129 Brownstone, D., Bunch, D. and Train, K. (2000) Joint Mixed Logit Models of Stated and Revealed Preferences for Alternative-Fuel Vehicles, Transportation Research Part B: Methodological, 34 (5), pp315-338 Campbell, J. Y. and Cocoo, J. F. (2005), How Do House Prices Affect Consumption? Evidence from Micro Data, NBER Working Paper Series No. 11534 Daly, A. (1999), How Much is Enough? Saturation Effects Using Choice Models, Traffic Engineering and Control, Oct. 1999, pp 493-495 Dargay, J. and Vythoulkas, P. (1999), Estimation of a Dynamic Car Ownership Model, A Pseudo-Panel Approach, Journal of Transport Economics and Policy, 33 (3), pp 287-302 Deaton, A. (1985), Panel Data from Time Series of Cross Sections, Journal of Econometrics, 30, pp109-26 Department for Transport (2004), Transport Statistics Bulletin, Vehicle Excise Duty Evasion, 2004, http://www.dft.gov.uk/stellent/groups/dft_transstats/documents/page/dft_trans stats_033061.hcsp

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Department for Transport (2005), Transport Statistics Great Britain, 2004, http://www.dft.gov.uk/stellent/groups/dft_control/documents/contentservertem plate/dft_index.hcst?n=11691&l=3 De Jong, G.C. (1989a) Some joint models of car ownership and car use, Ph.D. thesis, Faculty of Economic Science and Econometrics, University of Amsterdam. De Jong, G.C. (1989b) Simulating car cost changes using an indirect utility model of car ownership and car use, paper presented at PTRC SAM 1989, PTRC, Brighton. Garner, B.R., Godley, S. H. and Funk, R. R. (2002), Evaluating Admission Alternatives in an Outpatient Substance Abuse Treatment Program for Adolescents, Evaluation & Program Planning, 25 (3), pp287-295 Glied, S. (2002), Youth Tobacco Control: Reconciling Theory and Empirical Evidence, Journal of Health Economics, 21 (1), pp117-136 Green, W. H. (2003), Econometric Analysis, 5th Edition, New Jersey: Pearson Education Inc. Hanly, M. and Dargay, J. (2000), Car Ownership in Great Britain A Panel Data Analysis, ESRC Transport Studies Unit, University College London Hensher, D., Bernard, P.O., Smith, N.C. and Wilthorpe, F.W. (1989), An Empirical Model of Household Automobile holdings, Applied Economics, 21, pp35-57 Lauer, C., (2003), Family Background, Cohort and Education: A French German Comparison Based on A Multivariate Ordered Probit Model of Educational Attainment, Labour Economics, 10 (2), pp231-252 NRTF (1997), National Road Traffic Forecasts (Great Britain) 1997, Working Paper No. 1, Car Ownership: Modelling and Forecasting, Department of the Environment, Transport and the Regions Office of Deputy Prime Minister (1999), Projections of households in England 2021, http://www.odpm.gov.uk/stellent/groups/odpm_housing/documents/page/odp m_house_604206.hcsp Office of National Statistics (2005), Focus on Family, http://www.statistics.gov.uk/focuson/families/ Propper, C., Rees, H. and Green, K. (2001), The Demand for Private Medical Insurance in the UK: A Cohort Analysis, The Economic Journal, 111, May 2001, pp180-200 Revelt, D. and Train, K. (1998), Mixed Logit with Repeated Choices, Review of Economics and Statistics, 80, pp647-657
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Scottish Executive (2002), Household Projections for Scotland: 2000-Based, http://www.scotland.gov.uk/stats/bulletins/00179-00.asp Train, K. (2003), Discrete Choice Methods with Simulation, Cambridge: Cambridge University Press Treasury (2005a), HM Treasury Pocket Data Bank, 9th August 2005, http://www.hm-treasury.gov.uk/media/9B0/A8/pdb090805.xls Treasure (2005b), Budget 2005, Investing for our future: Fairness and opportunity for Britain's hard-working families, http://www.hmtreasury.gov.uk/budget/budget_05/budget_report/bud_bud05_report.cfm Verbeek, M. and Nijman, T. (1992), Can Cohort Data be Treated as Genuine Panel Data? Empirical Economics, 17, pp9-23 Weir, G. (2003), Self-employment in the UK labour market, Labour Market Trends, 111 (9), pp441-452 Whelan, G. (2001), Methodological Advances in Modelling and Forecasting Car Ownership in Great Britain, paper presented to European Transport Conference 2001, PTRC, Cambridge Whelan, G., Wardman, M. and Daly, A. (2000), Is There a Limit to Car Ownership Growth? An Exploration of Household Saturation Levels Using two Novel Approaches, paper presented to European Transport Conference 2000, PTRC, Cambridge

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Appendix
Table A-1 Constructing pseudo panel by household heads date of birth (mean age for all cohorts) 19761980 16 19711975 15 19661970 14 19611965 13 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 19561960 12 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 19511955 11 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 19461950 10 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 19411945 9 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 19361940 8 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 19311935 7 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 19261930 6 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 19211925 5 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 19161920 4 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 19111915 3 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 19061910 2 74 75 76 77 78 79 80 81 82 83 84 85 86 87 19011905 1 79 80 81 82 83

Born Group 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

20 21 22

19 20 21 22 23 24 25 26 27

19 20 21 22 23 24 25 26 27 28 29 30 31 32

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Table A-2 200106 F1

Forecast proportion of household owning at least one car 199600 F2 199195 F3 198690 F4 198185 F5 0.289 0.344 0.018 0.048 0.130 0.353 0.410 0.020 0.056 0.151 0.411 0.468 0.023 0.063 0.172 0.467 0.525 0.026 0.071 0.193 0.525 0.582 0.587 0.644 0.693 0.731 0.765 0.531 0.593 0.648 0.694 0.736 0.769 0.795 0.814 0.828 0.836 0.474 0.538 0.599 0.651 0.701 0.742 0.773 0.796 0.814 0.823 0.830 0.836 0.842 0.847 0.852 0.403 0.465 0.531 0.593 0.655 0.707 0.746 0.775 0.796 0.808 0.816 0.824 0.830 0.836 0.842 0.848 0.853 0.858 0.863 0.866 197680 F6 0.424 0.536 0.624 0.690 0.738 0.771 0.789 0.801 0.809 0.817 0.823 0.830 0.837 0.843 0.849 0.854 0.857 0.860 0.863 0.865 0.868 0.869 197175 F7 0.706 0.750 0.772 0.786 0.797 0.808 0.817 0.825 0.832 0.839 0.844 0.848 0.851 0.854 0.857 0.860 0.861 0.863 0.864 0.866 0.867 0.867 196670 F8 0.784 0.797 0.806 0.815 0.824 0.832 0.838 0.842 0.845 0.848 0.851 0.853 0.854 0.856 0.857 0.859 0.859 0.859 0.870 0.871 0.871 0.869 196165 F9 0.821 0.824 0.827 0.831 0.836 0.840 0.843 0.845 0.847 0.848 0.850 0.850 0.850 0.862 0.863 0.864 0.861 0.857 0.852 0.847 0.841 0.838 195660 F10 0.818 0.827 0.830 0.833 0.836 0.839 0.840 0.840 0.853 0.855 0.856 0.852 0.848 0.842 0.836 0.830 0.826 0.822 0.818 0.813 0.808 0.806 195155 F11 0.825 0.825 0.825 0.840 0.844 0.845 0.842 0.837 0.832 0.825 0.817 0.812 0.807 0.803 0.797 0.791 0.789 0.789 0.789 0.789 0.789 0.787 194650 F12 0.816 0.825 0.821 0.815 0.808 0.801 0.796 0.791 0.786 0.780 0.772 0.770 0.770 0.770 0.770 0.770 0.767 0.762 0.757 0.752 0.746 0.743 194145 F13 0.801 0.780 0.769 0.761 0.754 0.748 0.747 0.747 0.748 0.748 0.748 0.744 0.739 0.733 0.727 0.719 0.716 0.713 0.711 0.710 0.708 0.704 193640 F14 0.764 0.733 0.720 0.716 0.716 0.718 0.716 0.712 0.706 0.699 0.690 0.685 0.682 0.679 0.677 0.675 0.670 0.663 0.655 0.646 0.637 0.628 193135 F15 0.705 0.688 0.675 0.664 0.656 0.650 0.646 0.644 0.642 0.640 0.637 0.631 0.623 0.614 0.604 0.592 0.582 0.572 0.562 0.552 0.542 0.533 192630 F16 0.606 0.596 0.589 0.584 0.583 0.584 0.581 0.575 0.566 0.555 0.543 0.531 0.520 0.509 0.497 0.486 0.475 0.464 0.454 0.443 0.432 0.423 192125 F17 0.462 0.480 0.485 0.483 0.478 0.473 0.466 0.459 0.450 0.439 0.428 0.417 0.406 0.396 0.385 0.375 0.365 0.357 0.349 0.342 0.334 191620 F18 0.382 0.382 0.377 0.371 0.365 0.360 0.355 0.349 0.341 0.332 0.323 0.315 0.307 0.300 0.293 0.286 191115 F19 0.246 0.267 0.273 0.273 0.272 0.270 0.267 0.263 0.258 0.252 0.246 190610 F20 0.204 0.213 0.213 0.211 0.210 0.208

Born Cohort 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Note:

Number in red is derived from Family Expenditure Survey; Number in pink is estimated using parameters from the static car ownership model; Number in grey refers to estimate for partial cohorts.

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Table A-3 200106 F1

Forecast proportion of household owning two or more cars 199600 F2 199195 F3 198690 F4 198185 F5 0.020 0.033 0.001 0.004 0.011 0.030 0.046 0.002 0.006 0.015 0.041 0.059 0.003 0.007 0.020 0.054 0.074 0.004 0.010 0.026 0.071 0.093 0.096 0.121 0.149 0.179 0.215 0.078 0.101 0.125 0.152 0.185 0.222 0.262 0.303 0.343 0.370 0.063 0.083 0.104 0.128 0.158 0.192 0.230 0.270 0.310 0.340 0.363 0.380 0.392 0.402 0.409 0.047 0.063 0.082 0.104 0.131 0.163 0.198 0.236 0.275 0.307 0.333 0.353 0.369 0.381 0.390 0.398 0.405 0.411 0.416 0.421 197680 F6 0.098 0.124 0.152 0.182 0.215 0.251 0.281 0.306 0.326 0.343 0.357 0.369 0.379 0.387 0.394 0.400 0.406 0.412 0.418 0.424 0.429 0.433 197175 F7 0.205 0.237 0.261 0.282 0.302 0.320 0.336 0.350 0.361 0.371 0.380 0.387 0.395 0.402 0.409 0.415 0.420 0.425 0.429 0.433 0.437 0.440 196670 F8 0.261 0.281 0.298 0.314 0.329 0.344 0.357 0.369 0.380 0.389 0.398 0.404 0.410 0.416 0.420 0.425 0.428 0.430 0.437 0.440 0.442 0.439 196165 F9 0.266 0.288 0.308 0.327 0.346 0.363 0.377 0.388 0.397 0.404 0.410 0.414 0.417 0.425 0.428 0.430 0.428 0.423 0.417 0.410 0.402 0.395 195660 F10 0.334 0.349 0.360 0.370 0.380 0.390 0.396 0.401 0.411 0.415 0.417 0.415 0.410 0.403 0.395 0.386 0.378 0.369 0.360 0.349 0.337 0.328 195155 F11 0.425 0.405 0.395 0.399 0.400 0.403 0.400 0.395 0.388 0.379 0.369 0.360 0.350 0.339 0.326 0.312 0.301 0.292 0.282 0.273 0.263 0.252 194650 F12 0.381 0.380 0.373 0.364 0.355 0.345 0.336 0.326 0.314 0.300 0.284 0.272 0.260 0.249 0.237 0.226 0.214 0.202 0.190 0.179 0.168 0.160 194145 F13 0.336 0.315 0.297 0.281 0.265 0.248 0.235 0.222 0.210 0.198 0.187 0.175 0.164 0.153 0.144 0.134 0.128 0.124 0.121 0.119 0.118 0.115 193640 F14 0.228 0.202 0.182 0.167 0.156 0.146 0.138 0.130 0.122 0.115 0.109 0.105 0.102 0.101 0.099 0.098 0.096 0.094 0.091 0.088 0.084 0.082 193135 F15 0.164 0.139 0.121 0.107 0.098 0.091 0.088 0.086 0.085 0.084 0.083 0.081 0.079 0.076 0.073 0.070 0.068 0.066 0.064 0.062 0.061 0.059 192630 F16 0.103 0.086 0.076 0.071 0.069 0.068 0.067 0.065 0.063 0.061 0.058 0.056 0.054 0.053 0.051 0.049 0.048 0.046 0.045 0.044 0.042 0.041 192125 F17 0.062 0.056 0.052 0.049 0.047 0.046 0.044 0.044 0.042 0.041 0.040 0.038 0.037 0.036 0.035 0.033 0.032 0.031 0.030 0.029 0.029 191620 F18 0.029 0.031 0.031 0.031 0.030 0.030 0.030 0.029 0.028 0.027 0.026 0.026 0.025 0.024 0.023 0.022 191115 F19 0.009 0.017 0.019 0.020 0.020 0.020 0.020 0.019 0.019 0.018 0.018 190610 F20 0.013 0.014 0.014 0.014 0.014 0.014

Born Cohort 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Note:

Number in red is derived from Family Expenditure Survey; Number in pink is estimated using parameters from the static car ownership model; Number in grey refers to estimate for partial cohorts.

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