Car Ownership? Evidence from the Copenhagen Metropolitan Area

demographic composition of neighbourhoods.
6.3 Car ownership
We argued in section 3 that we expect that improving public transport will have a nonpositive
impact on car ownership. This is confirmed by the simulation study. The model suggests that the
number of car owners will be reduced as a result of the metro extension. Table 5 shows that
number of one car owners will decrease by 2.9% if housing supply would be elastic and by 2.3%
with inelastic supply (house price adjust). For two car owners the corresponding figures are 4.5%
and 3.1%, respectively. Clearly some households that would give up their car (or one of their
cars) if they could move to the areas where metro accessibility improved will change this
intention when house prices adjust. When interpreting these figures, it should be noted that they
refer to the whole GCA. Changes in the shares of car owners are much larger in the
neighbourhoods that are directly affected by the extension, see Map 9.
Table 5: Car ownership
Reference scenario Scenario 1 Scenario 2
Fixed prices Fixed supply
One car households 85,388 82,906 83,389
Two cars households 17,495 16,695 16,949
Total number of cars 120,378 116,295 117,287
6.4 Welfare change
There are various ways to assess the impact of the extension of the Copenhagen metro network.
The first possibility is to look at what its impact will be on the welfare of those involved if
choice behaviour would remain unchanged. All households therefore stay in their initially chosen
alternative. We can compute the compensating variation of these households.
It is, of course, unlikely that choice behaviour remains unchanged. The areas that become
more attractive will be chosen more frequently unless prices change. In our second assessment
we assume this to be the case. Since we do not yet take into account house price adjustments, this
requires housing supply to be infinitely elastic. Alternatively, it can be regarded as indicating the
change in pressure on the existing housing stock that is the result of the improved public
transport. Note also, that households do not only switch to other areas, but also to other positions
with respect to car ownership, and here the assumption of elastic supply is more realistic.
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