Why do more unequal countries spend more on private vehicles? Evidence and implications for the future of cities

Abstract

Household transport expenditure (HTE) can account for issues of transport affordability and of how mobility interacts with other needs. Income inequality, on the other hand, is crucially linked to both transport demand and institutions that can shape transport regimes. However, existent literature has scarcely linked income inequality and HTE. This research provides evidence about this link. Income concentration by the richest 10 per cent of the population is found to be significantly, positively and exogenously correlated with HTE on purchase and use of private transport equipment. The proposed econometric models can explain close to half of the variance of this type of HTE among countries. Two theoretical explanations are proposed and debated. One is demand-based, and the other supply-based. The latter is preferred over the former, stating that income concentration by the elites is a proxy of a balance of power that is associated to private-oriented transport regimes. Such regimes promote private goods over public goods or, in other words, car dependency, transport disadvantage, and/or informal transport over strong public transport networks. A fundamental challenge for the future of cities is that more unequal societies are in danger of producing wider inequalities after adopting private-oriented smart transport technologies.