Econometric Analysis of the Effect of Car Ownership on Welfare Rates

Abstract

As public transportation systems are being withdrawn or reduced in size, the role of the private car as a necessity is increasing in rural areas. However, the ownership of automobiles is generally not permitted when receiving welfare benefits. It has been pointed out that this may be contributing to the suppression of welfare benefit utilization in rural areas, but there have been few empirical studies focusing on this causal relationship. In this paper, we conducted a quantitative analysis using the instrumental variables method and fixed effects model to examine the impact of automobile ownership rates on welfare benefit rates in regions. The results of the analysis revealed that, in models without fixed effects, an increase in automobile ownership rates was found to have a significant negative relationship with welfare rates, suggesting that automobile ownership may be suppressing welfare rates in regions. This suggests that the nationwide uniform restrictions on automobile ownership may be acting as a barrier to welfare utilization in rural areas, necessitating a reexamination of the implementation of the system in light of its intended purpose.