A Study of Car Demand and Its Interdependency in Sarawak

Authors

  • Nur Zaimah Ubaidillah Universiti Malaysia Sarawak

DOI:

https://doi.org/10.33736/ijbs.3307.2020

Keywords:

Car ownership, motorcycle ownership, interdependency, vector error correction model, fuel price, gross domestic product, SDG7

Abstract

Several developing Asian countries recorded a high level of private based motorisation, specifically car and motorcycle ownership. Continuous rise in the level of private motorisations may lead to issues such as traffic congestions, high fuel consumption and pollutions. For that reason, there is a need to investigate the determinant of car ownership and the interdependency between car and motorcycle ownership in Sarawak, Malaysia. This study used time series annual data using vector error correction model (VECM) from 1980 to 2018. Based on the analysis, it is found that gross domestic product, fuel price and population density are significant determinants of car ownership. The findings revealed that as the standard of living rises, car demand increases. At the state aggregate level, it is found that there is a substitution relationship between both modes. This indicates that people are highly likely to shift from motorcycle ownership to car ownership in the long run. Based on the findings, the policy recommendations in the study include encouraging shifts to alternative modes of transport through public transport reforms as well as improving facilities for a more sustainable mode of transportation in Sarawak.

References

Anastasopoulos, P., Karlaftis, M., Haddock, J., & Mannering, F. (2012). Household Automobile and Motorcycle Ownership Analyzed with Random Parameters Bivariate Ordered Probit Model. Transportation Research Record: Journal of the Transportation Research Board, 2279, 12–20. doi: https://doi.org/10.3141/2279-02

Barter, P. (1999). An International Comparative Perspective on Urban Transport and Urban Form in Pacific Asia: The Challenge of Rapid Motorisation in Dense Cities. Murdoch University. Retrieved from http://researchrepository.murdoch.edu.au/3332/

Census and Economics Information Centre (CEIC). (2019). Malaysia Motor Vehicles Registration. Retrieved from https://www.ceicdata.com/en/malaysia/motor-vehicles-registration

Chiou, Y. C., Wen, C. H., Tsai, S. H., & Wang, W. Y. (2009). Integrated modeling of car/motorcycle ownership, type and usage for estimating energy consumption and emissions. Transportation Research Part A: Policy and Practice, 43(7), 665–684. doi: https://doi.org/10.1016/j.tra.2009.06.002

Davis, S., & Boundy, R. (2019). Transportation Energy Data Book. Annual Review of Energy and the Environment (37th ed.). US: Department of Energy. Retrieved from https://doi.org/10.1146/annurev.energy.14.1.375

Department of Statistics Malaysia (DOSM). (2016). Household Income and Basic Amenities Survey. Putrajaya.

Department of Statistics Malaysia (DOSM). (2019). Malaysia Yearly Book of Statistics. Putrajaya.

Dickey, D. A., & Fuller, W. A. (1979). Distribution of the estimators for autoregressive time series with a unit root. Journal of The American Statistical Association, 74(366), 427–431. doi: https://doi.org/10.2307/2286348

Fujimoto, H. (2008). The Modal Shift to Environmentally Sustainable Transport: Prospects of Urban Transport Systems: LRT, BRT and Buses. Science & Technology Trends Quarterly Review. Tokyo. doi: https://doi.org/10.1017/CBO9781107415324.004

Gomez-Gelvez, J. A., & Obando, C. (2014). Joint Disaggregate Modeling of Car and Motorcycle Ownership. Transportation Research Record: Journal of the Transportation Research Board, 2451(1), 149–156. doi: https://doi.org/10.3141/2451-17

Goodwin, P., Dargay, J., & Hanly, M. (2004). Elasticities of road traffic and fuel consumption with respect to price and income: A review. Transport Reviews, 24(3), 275–292. doi: https://doi.org/10.1080/0144164042000181725

Graham, D. J., & Glaister, S. (2002). The demand for automobile fuel: A survey of elasticities. Journal of Transport Economics and Policy, 36(1), 1–26.

Hashim, S. F., Hashim, H., & Shuib, K. B. (2017). Residents’ perspective on cycling as an option for transportation in Putrajaya. Planning Malaysia, 6, 97–108. doi: https://doi.org/10.21837/pmjournal.v16.i6.271

Herwangi, Y. (2018). Motorcycle dependency in low-income people : modeling spatial and socioeconomic factors in urbanized area of yogyakarta. Jurnal Plano Madani, 7(2), 196–208.

Hess, D. B., & Ong, P. M. (2002). Traditional neighborhoods and automobile ownership. Transportation Research Record, (1805), 35–44. doi: https://doi.org/10.3141/1805-05

Hsu, T. P., Tsai, C. C., & Lin, Y. J. (2007). Comparative Analysis of Household Car and Motorcycle Ownership Characteristics. Journal of the Eastern Asia Society for Transportation Studies, 7, 105–115.

Hsu, T. P., Mohd. Sadullah, A. F., & Nguyen, X. D. (2003). A comparative study on motorcycle traffic development of Taiwan, Malaysia and Vietnam. The Eastern Asia Society for Transportation Studies (EASTS). Retrieved from http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.460.2229&rep=rep1&type=pdf

Islam, R., Ghani, A. B. A., Kusuma, B., & Hong, E. T. Y. (2016). An analysis of factors that affecting the number of car sales in Malaysia. International Review of Management and Marketing, 6(4), 872–882.

Johansen, S., & Juselius, K. (1990). Maximum likelihood estimation and inference on cointegration- with applications to the demand for money. Oxford Bulletin of Economics and Statistics, 52(2), 169–210. doi: https://doi.org/10.1111/j.14680084.1990.mp52002003.x

Lim, B., Jacob, S. M., Issac, B., & Lim, E. (2007). Efficient Transport And Economic Development : A Transport Survey Analysis. In International Economic Conference on Trade and Industry (IECTI) (pp. 1–15). Penang. Retrieved from http://repo.uum.edu.my/2397/

Maysami, R. C., & Koh, T. S. (2000). A vector error correction model of the Singapore stock market. International Review of Economics and Finance, 9(1), 79–96. doi: https://doi.org/10.1016/S1059-0560(99)00042-8

Ministry of Domestic Trade Co-operatives and Consumerism (MDTCC). (2019). Malaysian Fuel Price. Putra Jaya.

Newman, P. W. G., & Kenworthy, J. R. (1989). Gasoline consumption and cities: A comparison of U.S. cities with a global survey. Journal of the American Planning Association, 55(1), 24–37. doi: https://doi.org/10.1080/01944368908975398

Organisation Internationale des Constructeurs d’Automobiles (OICA). (2018). World Motor Vehicle. International Organization of Motor Vehicle Manufacturers. Retrieved from http://www.oica.net/

Pojanavatee, S. (2014). Cointegration and causality analysis of dynamic linkage between stock market and equity mutual funds in Australia. Cogent Economics and Finance, 2(1), 1–17. doi: https://doi.org/10.1080/23322039.2014.918855

Pongthanaisawan, J., & Sorapipatana, C. (2010). Relationship between level of economic development and motorcycle and car ownerships and their impacts on fuel consumption and greenhouse gas emission in Thailand. Renewable and Sustainable Energy Reviews, 14(9), 2966–2975. doi: https://doi.org/10.1016/j.rser.2010.07.034

Reza, A., & Spiro, M. (1979). The demand for passenger car transport services and for gasoline. Journal of Transport Economics and Policy, 13(3), 304–319. doi: http://www.jstor.org/stable/10.2307/20052550

Romilly, P., Song, H., & Liu, X. (1998). Modelling And Forecasting Car Ownership In Britain. A Cointegration And General To Specific Approach. Journal of Transport Economics and Policy, 32(2), 165–185.

Samad Nawi, A., Bashir Ahmad, S. A., Mahmood, W. M. W., Sekharan Nair, G. K., Siti Nurathirah, A., & Abdul Hamid, B. (2013). Determinants of passenger car sales in Malaysia. World Applied Sciences Journal, 23, 67–73. doi: https://doi.org/10.5829/idosi.wasj.2013.23.eemcge.22013

Sandu, M. C. (2015). A Time Series Analysis Using R for Understanding Car Sales On The Romanian Market. Revista RomâNă de Statistică, 63(3), 130–140.

Sanghi, A. K. (1976). The relationship between population density, automobile ownership and automobile use: Its role in transportation planning. Ann Reg Sci, 10, 118–127. doi: https://doi.org/10.1007/BF01291240

Sanko, N., Dissayanake, D., Kurauchi, S., Maesoba, H., Yamamoto, T., & Morikawa, T. (2014). Household car and motorcycle ownership in Bangkok and Kuala Lumpur in comparison with Nagoya. Transportmetrica, 10(3), 187–213.

Senbil, M., Zhang, J., & Fujiwara, A. (2007). Motorization in Asia. IATSS Research, 31(1), 46–58. doi: https://doi.org/10.1016/S0386-1112(14)60183-7

Shrestha, M. B., & Bhatta, G. R. (2018). Selecting appropriate methodological framework for time series data analysis. The Journal of Finance and Data Science, 4(2), 71–89. doi: https://doi.org/10.1016/j.jfds.2017.11.001

Tuan, V. A. (2011). Dynamic Interactions between Private Passenger Car and Motorcycle Ownership in Asia: A Cross-country Analysis. Journal of the Eastern Asia Society for Transportation Studies, 9, 541–556.

Ubaidillah, N. Z. (2019). Determinants of Car and Motorcycle Ownership and Use in Sarawak. University of Leeds. Retrieved from http://etheses.whiterose.ac.uk/id/eprint/26409

United Nation. (2015). Analysis of the Transport Relevance of Each of the 17 SDGs. Retrieved from https://sustainabledevelopment.un.org/content/documents/8656Analysis of transportrelevance of SDGs.pdf

United Nation. (2018). Accelerating SDG7 Achievement Policy Briefs in Support of the First SDG7 Review at the UN High-Level Political Forum 2018. Retrieved from https://sustainabledevelopment.un.org/content/documents/17501PB16.pdf

Verbeek, M. (2008). A Guide to Modern Econometrics (3rd Ed). Chichester, England: John Wiley & Sons.

Yamamoto, T. (2009). Comparative analysis of household car, motorcycle and bicycle ownership between Osaka metropolitan area, Japan and Kuala Lumpur, Malaysia. Transportation, 36(3), 351–366. doi: https://doi.org/10.1007/s11116-009-9196-x

Downloads

Published

2020-12-07

How to Cite

Nur Zaimah Ubaidillah. (2020). A Study of Car Demand and Its Interdependency in Sarawak. International Journal of Business and Society, 21(3), 997–1011. https://doi.org/10.33736/ijbs.3307.2020