Look: I am eager to learn stuff I don't know--which requires actively courting and posting smart disagreement.

But as you will understand, I don't like to post things that mischaracterize and are aimed to mislead.

-- Brad Delong

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Everything that appears on this blog is the copyrighted property of somebody. Often, but not always, that somebody is me. For things that are not mine, I either have obtained permission, or claim fair use. Feel free to quote me, but attribute, please. My photos and poetry are dear to my heart, and may not be used without permission. Ditto, my other intellectual property, such as charts and graphs. I'm probably willing to share. Let's talk. Violators will be damned for all eternity to the circle of hell populated by Rosanne Barr, Lady Gaga, and trombonists who are unable play in tune. You cannot possibly imagine the agony. If you have a question, email me: jazzbumpa@gmail.com. I'll answer when I feel like it. Cheers!

Thursday, February 23, 2012

Is America Losing Its Drive? - Pt. 3 Vehicles per 1000 Persons

In private communication, Roger Chittum got me thinking about the vehicle component of gasoline consumption. I'm going focus on the gross vehicle numbers, and not get too deeply into the car/truck/SUV product mix detail.   Data is from the Department of Energy TRANSPORTATION ENERGY DATA BOOK: EDITION 30—2011.   (Warning:  414 page pdf.)

According to Table 3-5 on page 3-9, vehicle ownership, measured as vehicles (both cars and trucks) per 1000 population, peaked in 2007 at 843.57, and dropped by 1.88% to 828.04 in 2009, two years later.  Data presented in the source is from 1900 to 2009.  This graph shows the data from 1950 to 2009.  Recessions are highlighted in red.




During the post WW II era up to 1982, recessions might have slowed the growth of vehicle ownership, but they did not cause a decline.  Even the severe recession of 1958 only caused a flat spot on the curve.

 

This changed with the double dip recessions of 1980 to 1982.

 

The reduction from 1981 to '82 is miniscule.  But since then, every recession has led to a significant reduction from the previous year.  As an aside, this is one more time series that shows a change in character right around 1980.



This source indicates the most recent value for the U.S. is 765, though it's not clear what "most recent" means.  If this is accurate, then ownership has back-tracked to the 1994 level.   This would correspond to a 7.6% drop from 2009, and an astounding 9.3% drop from the 2007 peak.  I don't believe it; but that value is indicated with a red dot on the next graph, as a point of reference.

I've also included some best fit straight lines to show how the slope has changed over time.  The decreasing slope and more serious response to recessions might result from a market being close to saturation, but that's just a guess.



One of the reasons I'm skeptical of the red dot point is that new vehicle sales have recovered substantially from the 2009 low, as this graph from Calculated Risk demonstrates.  (The August, 2009 spike is the cash for clunkers event.)




This might not be enough to stop a continuing slide in the vehicles per 1000 population number, but I think it's enough to keep it from falling off a cliff.

Another perspective on vehicle use comes from Table 3.3 on page 3-5 of the Data Book.  This graph shows the Federal Highway Administration estimate of vehicles in use.



Except for recessions (highlighted in red on the total line) growth of the total vehicle count has been been quite constant over four decades.  But, since the mid 80's, car sales have been stagnant.  All of the growth since then has come from truck sales.  It will be interesting to see how these trends develop over the next few years.

Part 2
Part 1
Cross posted at Angry Bear

11 comments:

Jerry Critter said...

I find the steep increase from about 1960 to 1980 interesting. I suspect it is a result of the strong growth of the middle class as more and more people were able to afford their first car.

Then economic policies changed and middle class growth took a hit.

Jazzbumpa said...

Jerry -

Good insight. I think you're on to something.

Cheers!
JzB

Stagflationary Mark said...

Here's a related post on oil that I did today that you might find interesting.

Real Oil Consumption per Capita

Is it any wonder that there is some demand destruction?

Roger Chittum said...

JzB and commenters, you've definitely advanced the ball of understanding. My contribution:

Joyce Dargay, Dermot Gately and Martin Sommer in a cross-border study found a relationship between incomes and yehicles per capita. http://www.econ.nyu.edu/dept/courses/gately/DGS_Vehicle%20Ownership_2007.pdf PDF alert.

"The relationship between the growth of vehicle ownership and per-capita income is
highly non-linear. Vehicle ownership grows relatively slowly at the lowest levels of per-capita
income, then about twice as fast as income at middle-income levels (from $3,000
to $10,000 per capita), and finally, about as fast as income at higher income levels, before
reaching saturation at the highest levels of income. This relationship is shown in Figure
1, using annual data over the entire period 1960-2002 for the USA, Germany, Japan and
South Korea; in the background is an illustrative Gompertz function that is on average
representative of our econometric results below. Figure 2 shows similar data for China,
India, Brazil and South Korea – with the same Gompertz function, but using logarithmic
scales. Figure 3 shows the illustrative Gompertz relationship between vehicle ownership
and per-capita income, as well as the income elasticity of vehicle ownership at different
levels of per-capita income."

The figures in that paper show US vehicles (cars and trucks) per 1000 pop trending toward what looks like a plateau at just over 800 per 1000. Consider some implications: The US car market is already saturated at current income levels and can only grow with population and/or real income growth (which is trending flat or down). Maybe all growth in auto sales will be capped by increasing useful lives of autos--maybe there will even be negative growth! Unlike previous CAFE standards, the new ones will reduce total highway fuel consumption because they won't be cancelled out by fleet size growth (as they were in the 1970s and 1980s); I assume that's why Exxon Mobile projects a 20% decrease in US passenger car fuel consumption by 2030. Page 18 of this PDF: http://www.exxonmobil.com/Corporate/files/news_pub_eo.pdf Transportation policy should switch emphasis from paving over more land to maintaining the roads and bridges we have.

BTW, I couldn't post this at AG because some machine claims it exceeds 10,000 characters.

Jazzbumpa said...

Roger -

I think my brain is saturated.

Maybe spending some time with young people is the R&R I need.

Birthday party for granddaughter Alexa tomorrow. She'll be 12 on Monday.

Yeah - that's the ticket!

Cheers!
JzB

P.S. Angry Bear has all sorts of weird posting problems that come and go.

Jazzbumpa said...

Roger -

Can't get to the Gately link. Looks like it's restricted to enrolled students.

JzB

Jerry Critter said...

I opened the link without any problem. Could your problem be that it is a PDF link?

Roger Chittum said...

JzB, I'm as mystified about the PDF link as I am about the character limit at AG. The link works for me, and I've never had any connection with NYU. Perhaps it's something personal. :-)

Jazzbumpa said...

Aha!

I copied too many characters and got an extra PDF in there.

Yep - time to party.

But first - U.S. saturation right around the 850 mark. Very interesting.

Cheers!
JzB

farm land investment said...

Jerry above makes a really good point. Could easily be directly correlated for about 20 years to rising middle class real incomes. And since 1980, in real terms, its pretty much been stagnation.

The Arthurian said...

"(Warning: 414 page pdf.)"

Thanks for the warning!

Jazz, look for a free download called doPDF. It installs as a virtual printer. The output of this printer is a PDF file.

You can use it to create one-page extracts from PDF files, page 3-9 or page 3-5 or whatever. Free & works great.