SWUTC Research Project Description
Title of Project: The Relationship Between Income and Personal Vehicle Fuel Efficiency and Associated Equity Concerns for the Fuel Tax
Project Number: 161007
Principal Investigator:
Ginger Goodin
(512) 467-0946
P.I. Affiliation: Texas A&M University
Project Monitor:
Mary Meyland
Texas Department of Transportation
125 E 11th St.
Austin, TX
(512) 305-9508
Project Status: Active
Date Started: 9/1/09
Estimation Completion Date: 8/31/10
Estimated Cost - Current Fiscal: $30,000
Estimated Cost - Total Planned: $30,000
Project Summary:
Project Abstract:
This research is aimed at exploring any potential income equity issues with state and federal excise taxes on fossil fuels. Fuel taxes by their very structure are regressive with regards to income, since they levied as fixed amount that does not vary based on income. Hence, the financial burden of the tax is greater on lower income drivers. Furthermore, there may be additional equity concerns if there is a relationship between average vehicular fuel efficiency and income. Vehicles with lower fuel efficiencies burn more fuel to travel a given distance than a highly fuel efficient vehicle. This means that the driver of lower fuel efficiency vehicle pays more in taxes to use a given facility per-mile than the driver of a more fuel efficient vehicle. If there exists a relationship between income and personal vehicle fuel efficiency, such that lower income individuals are more likely to drive a less fuel efficient vehicle, then on average lower income drivers are paying more for equal use of the national road system. This further reduces the income equity of the fuel tax. This research effort will explore this potential relationship by examining State of Texas maintained vehicle registration records and comparing them to U.S. Census Bureau income data. Registration records will be sorted and using information from the Environmental Protection Agency’s CAFE standards, a distribution of average fuel efficiencies will be developed for each area. This data will be analyzed with U.S. Census Bureau Data to determine if a link exists between an area’s average income and its distribution of vehicular fuel efficiencies.
Project Objectives:
Researchers hope to add to the body of knowledge with regards to transportation financing equity in general so as to allow for a more informed debate on potential reforms to the system. A lack of data with regards to income and fuel efficiency prevents a more informed dialogue of the merits of various transportation financing options.` It is not the researchers’ intention to expose the fuel tax as an inequitable revenue generating mechanism so as to undermine its creditability with the public.
Task Descriptions:
Task 1: Data gathering
One of the barriers facing research on this specific topic is a lack of data linking fuel efficiency with income. This type of data may be gathered through surveys but, given the costs, researchers have opted to pursue available data sources.
In the initial phase of this research the Texas Department of Transportation will be approached to provide records regarding statewide vehicle registrations, which it is tasked with maintaining under state law. Processing all vehicle registration records for the state would be an extremely arduous task given the budget for this research effort, so depending on the organization of the data provided by the state researchers will focus on vehicle registrations that occurred within a specific time frame or vehicle registrations for certain areas of the state. Regardless of the aforementioned filters applied in compiling the data, it will be necessary to insure that a broad sample of urban, suburban and rural registrations are obtained and that these areas have an acceptable distribution of income groups.
Researchers have budgeted for the services of Jerry Dike, past director of the Vehicle Titles and Registration Division of the Texas Department of Transportation (TxDOT) and former chief motor vehicle administrator with the American Association of Motor Vehicle Administrators (AAMVA) to assist in obtaining the required data from TxDOT. If necessary, Mr. Dike will assist in contacting various Department’s of Motor Vehicle within the state of Texas, as well as other states with whom he has contacts, about participating in this study and providing the necessary information.
Researchers will insure that any and all personal information that may be included in the data received is removed in a manner that protects security and privacy. No personal information is required for this research other than a geographic locator. If geographic locators are provided in the form of street address, researcher will insure that the data is secure and that there is no information linking those addresses, or any other information contained in the datasets, to a specific person.
Researchers hope to have all necessary data collected by November 1, 2009. With regards to obtaining information from TxDOT, it will be crucial to insure that data is obtained well in advance of this date, as of that day TxDOT will relinquish it’s authority for maintaining Texas vehicle registration records to the newly developed State Department of Motor Vehicles.
Task 2: Data Processing
Once the necessary records have been obtained, it will be necessary to convert much of the information into a usable form. For example, motor vehicle registration agencies do not collect information on vehicle fuel efficiency. They do, however, collect information on vehicular make and model as well as the year of the vehicle. Using this data, along with CAFE standards data from the Environmental Protection Agency, researchers will convert the make, model and year of each vehicle registered into an estimated fuel efficiency value using a database management program such as Microsoft Access.
It will also be necessary to group vehicle registrations by geographic location. This is necessary because DMV registrations do not collect information on the income vehicle owners. As such, it will be necessary to have location identifiers so that data can be compared to income data obtained from the U.S. Census bureau. Ideally, the vehicle registration records obtained will include street address, which can then be geo-coded and assigned to census bloc, the smallest geographical unit for which statistically significant income data can still be obtained. However, it may only be possible to obtain broad geographic locators such as zip code. Jerry Dike is confident, however, that researchers will be able to obtain registration data that includes street addresses.
Once the registration data has been converted to show estimated fuel efficiency and geographic indicators have been identified, the registration will be aggregated based on geography and a distribution of average fuel efficiencies within these areas will be compiled. This data (the distribution of average fuel efficiency based on geographic indicator and income data from the census bureau) will serve as the basis for the analysis in Phase 3.
Task 3: Data Analysis
Researchers will use the aforementioned data to determine if income has an effect on average vehicular fuel efficiency. Data will be sorted by both geography and then based on income, and researchers will examine how the distribution of average fuel efficiencies within these groups changes. For example, the distribution of average fuel efficiencies in high income urban areas will be compared to the distribution in higher income rural and suburban areas (and the same will be done for mid-income and lower income rural, urban and suburban areas) to see if the distribution of fuel efficiencies are constant across all income groups. The distributions will then be analyzed based on differences in between low income, mid income and high income areas within urban areas (as well as rural and suburban areas). Finally, the data will be aggregated regardless of urban, suburban and rural classification to determine how income affects the distribution of fuel average fuel efficiencies at the state level.
Task 4: Documentation
Phase 4 will consist of preparing the required technical memorandums and a final report, which will provide a description of the problem, describe the adopted research approach and methodology, and present findings, conclusions, and any recommendations. The report will completely document all data gathered, analyses performed, and results achieved. Researchers will also prepare presentation to be made for interested parties and prepare documents for publication in various journals and industry magazines.
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