Mileage-Based User Fee Winners and Losers - RAND Corporation

vehicles. Households with two or three vehicles have a higher average VMT per vehicle than
households with only one vehicle. However, this trend falls as the number of vehicles increase.
There is clearly a positive relationship between the number of vehicles and total household VMT.
While some households with many vehicles may be large with many workers and children, others
may just own a collection of motorcycles or antique cars, for example, and the relationship between
the number of vehicles and VMT begins to weaken after six or seven vehicles. Therefore, the ratio
of vehicles to adults is also an important, separate, predictor of VMT.
Table 3.3 Number of Vehicles per Household, 2008-09
Number
of Vehicles
Percent of
Population
Average
VMT
Average
VMT/Vehicle
0 8.6 0 0
1 32.3 10,690 10,690
2 36.3 23,970 11,985
3 14.4 34,376 11,459
4 5.4 42,638 10,659
5 2.0 49,604 9,921
6 0.7 56,587 9,431
7 0.2 66,384 9,483
8 or more 0.2 73,327 9,166
The primary limitation of this model is the bias introduced by not directly accounting for
the fact that vehicle choice is endogenous. This approach was deliberately chosen because it is
relatively simple, easier to interpret the results, and requires no additional data. Most importantly,
this model preserves the detail on the number and range of household vehicle characteristics that is
available in the NHTS. A multinomial logit model that would simultaneously model household
vehicle and modal choices would require more assumptions and simplifications that would negate
the value the detail of the NHTS data (West 2005; Valluri 2008; Bento et al. 2009).
To partially address this limitation, the natural log of price is interacted with the number of
vehicles and the relative fuel economy of the household’s primary vehicle, which is discussed below.
In examining the relationship between the number of vehicles in a household and the estimated
price elasticity of that household, it was found that a household with two vehicles is significantly less
elastic than a household with one, and a household with three vehicles is even less elastic. There is
little change in the elasticity in households with more than three vehicles. Various specifications were
considered to model this non-linear relationship. 32 The final approach, to interact the natural log of
price with two dummy variables indicating the number of household vehicles, is appealing because it
is straightforward and statistically significant. The first dummy variable equals one if a household
owns 2 vehicles and the second dummy variable equals one if the household owns more than 2
vehicles. Both dummy variables equal zero for households that own only 1 vehicle.
Great Circle Distance to Work
The household’s distance to work, a continuous variable, is the “great circle” distance
between the household’s home address and work address (US FHWA 2011). In cases where more
than one worker resides in a household, the longest distance is used. “Great circle” describes the
32 Other model specifications considered included interacting the natural log of price with the continuous number of vehicles variable,
creating separate dummy variables for additional number of household vehicles (3, 4, 5, 6, and more than 6 vehicles), and with the
household type set of indicator variables discussed below.
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