Private Car Ownership in China: How Important is the effect of Income?

While it is widely accepted that income is the major drive for private car ownership, the car ownership levels do not match the income levels across regions in China. This paper explores this “car ownership divergence” phenomenon from various aspects. It is found that income effect is strong at both national levels and within regions. However, even if per capita income may still be an important factor to explain car ownership difference across the regions, its explanatory power dropped considerably. Further discussion reveals that charges and fees imposed on private car owners by authorities at different levels may have a strong influence on car ownership level. The paper concludes with discussions on implications of this study