Transportation Expenditures and Ability to Pay: Evidence from Consumer Expenditure Survey

Abstract

Data at several levels of aggregation and spatial resolution show that mobility (measured by different outcomes such as vehicle miles traveled and automobile ownership) increases with income. It is equally likely that, in turn, investments in mobility (purchase and operation of private automobiles, consumption of public transportation services) allow greater quality of life in general and the ability to increase one's income. This possibly circular relationship is explored by using the Consumer Expenditure Survey (CEX) data set. Single-equation Tobit models of annual household transportation expenditures are posited with, in the first case, annual before-tax income and, in the second case, annual total household-level expenditures as a proxy for permanent income. With a variety of demographic, community and spatial, economic, family, and life-cycle conditions of the household controlled, it is found that permanent incomes explain mobility investments better than annual incomes. However, mobility investmen...