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Michael Li, Daren Lau and Daniel Seah

Articles, 2011, vol. 38, issue 1

Abstract: Based on a household survey, this study investigates the income effect of car ownership decisions and studies key variables that influence working trip decision in the Singapore context. A binary logit model reveals that the income elasticity for car ownership is 0.5944, meaning that car owners tend to treat cars as necessity for commuting purposes. The low income elasticity implies that the Singapore government can lower the annual vehicle population growth rate from currently 3% to a range of 1 to 2%, which is more sustainable in the long run. A discrete choice model between public transport and private transport indicates that the income elasticity for public transport and private transport is given by -0.257 and 1.385 respectively. The cost elasticity of the private transport and public transport is given by -0.888 and -0.020, respectively, implying that changes in usage costs have big influence on car owners on decision of driving to work and the public transport users remain to be captive users. The cross travel-time elasticity of private transport for public transport is 1.157, which implies that substantial reduction in the travel time by public transport will attract more car users to public transport. To achieve this, the government should expand the bus priority lanes during the peak times and encourage bus operators to offer express services. Finally, the implied value of travel time savings (VTTS) during peak hours for private transport is S$22.76, about 102% of the gross average wage rate of car owners, which is an important parameter for congestion pricing scheme.

Date: 2011
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