Impact of Vehicle Registration Fee on Travel Behavior

Rapid advances in technology, aging infrastructure and dwindling funding resources together have resulted in a setback for the transportation industry. Hence, the government is actively looking for alternative funding sources to support transportation infrastructure development and fill in the gaps in funding. One of the funding sources being looked upon by many states is vehicle registration fee. Several states have recently increased the registration fee and others states are considering the same. However, an increase in vehicle registration fee can also alter travel behavior. Hence, it is important to understand the implications of change in vehicle registration fee from policy perspective. The study aims at exploring impact of vehicle registration fee on household vehicle ownership and Vehicle Miles Travelled (VMT) per vehicle in the state of Texas. The analysis is done at the household level for vehicle ownership and vehicle level for VMT using Multinomial Logarithmic Regression (MNL) and Ordinary Least Squares (OLS) regression technique, respectively. The National Household Travel Survey, 2009 and American Community Survey data is used for the analysis. The results show that vehicle registration fee does have surprisingly significant impact on vehicle ownership, as it is a fixed cost associated with owning vehicle. The impact is more in rural areas as compared to urban areas and varies by income groups. In contrast, there is no statistically significant impact on VMT. Hence, impact of vehicle registration fee should be considered when state or local government increase vehicle registration fee to fill in funding gaps for their transportation needs, as it may lead to decline in vehicle ownership and impact the funds generated from vehicle registration and the transportation economy.