Increasing fuel prices as a way of reducing household annual car use : evidence from the short panels of Finnish households.

This paper presents some results of a survey of household car use and car use intentions under increasing fuel tax, that has been conducted in Finland in each year from 1990 on. Although households had reported quite large intentions to reduce car use if fuel prices rose in the future, such intentions are not necessarily carried out. The research focused on estimating the price and income effects of car use, allowing for heterogeneity across households and possible non-separability of car use demand from labour supply and car ownership. A conditional demand economic model of households' annual car use was derived. A summary of the statistical analysis of the sample survey data is presented, presented, and the nonresponse problem is discussed. Some preliminary results from one-way linear models are given. The fixed and random effects models of a household's car use were estimated and tested against each other. Although the study is still in progress, so that final conclusions cannot yet be presented, its results show that simple demand models can say little about the factors influencing car use decisions in households. Some possible refinements of the study are suggested.