An endogenous switching simultaneous equation system of employment, income, and car ownership

The research presented here makes an advance toward the inclusion of employment and income within a transportation framework based on the conceptual framework developed by the authors in a preceding paper. Employment and income are important determinants of travel behavior. They have been used as exogenous variables in travel forecasting models such as trip generation models, car ownership models and mode choice models. This paper proposes a fundamental change in the current view of employment and income as exogenous variables in travel demand models. In particular, we emphasize the need, both from a forecasting and estimation point of view, to include employment and income as endogenous variables within a disaggregate travel demand modeling framework. The paper formulates and estimates an integrated model of employment, income and car ownership, which takes account of interdependencies among these variables and their structural relationships with relevant exogenous variables.