Automobile ownership and mode choice: Learned or instrumentally rational?

Abstract

Automobile ownership and mode choice are typically analyzed as functions of individual characteristics and features of the transportation system. Individual characteristics reflect preferences; transportation characteristics capture context. Increasing interest has been devoted to understanding to what extent preferences are learned. Using the Census Bureau’s PUMS data, we develop a multinomial probit model accounting for the endogeneity of automobile ownership to investigate whether commuting mode choices are influenced by past exposure. We proxy exposure by previous residence, differentiating people who previously lived in “transit-robust” metropolitan areas, metropolitan areas, and non-metropolitan areas. Consistent with previous work, we find that, among recent movers, past residence has an impact on decisions with respect to auto-ownership which we understand as habit formation. Mode choice decisions for recent movers, on the other hand, appear to be made more on prevailing conditions and modal trade-offs faced in the present. The results suggest that for people moving to transit robust cities (1) walking and bicycling are linked to past residence; (2) automobile ownership is inversely correlated with the utility of walking and both decisions are made simultaneously; (3) though automobile ownership is inversely correlated with utility for transit use, there is no endogeneity in the two decisions; (4) while finding evidence that habits formed in the previous residency with respect to automobile ownership, these effects on mode choice appear to be small in magnitude. Mode choice decisions by recent movers are predominately made based on the environment rather than being influenced by past experience.