This paper examines the factors determining car ownership for households living in rural and urban areas. A dynamic car ownership model is estimated using a pseudo-panel approach, based on data from Family Expenditure Surveys in the UK for 1982 to 1995. The results show that rural households' car ownership is far less sensitive to motoring costs than that of their urban counterparts. The implication of these results is that general increases in the costs of car transport would pose a considerable economic burden for rural households, and that other area-specific transport measures may be more suitable, particularly from an equity point of view
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