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INFERRING PRICE ELASTICITIES OF CAR USE AND MORAL COSTS OF DRIVING WITHOUT A LICENCE

by Finn Jørgensen Bodø Graduate School of Business, 8049 Bodø, Norway E-mail: Finn.Joergensen@hibo.no and Joyce Dargay Transport Studies Unit, Oxford University, South Parks Road, Oxford, OX1 3QY, UK E-mail: jdargay@ouce.ox.ac.uk

Corresponding author: Finn Jørgensen

Abstract

The article develops a model which makes it possible to infer drivers’ perceived extra costs per km of driving without a license and the moral costs of doing so. Furthermore, it gives estimates of the ratios between responses to car license suspension in different time perspectives. The calculations are carried out using data over car holders’ willingness to pay for not losing their driving license for 12 months and 24 months, their yearly driving distance and variable car usage costs. The elasticity ratios estimated here are compared with previous studies of short-term and long-term elasticities of car usage with respect to car usage costs.

Keywords: Licence suspension, car usage, elasticity ratios, moral costs

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