Agenda Packet 9-11-19 Work Session

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Opinion: Turns out, millennials love cars as much as anyone else By Christopher Knittel Published: May 17, 2019 9:38 a.m. ET Their car choices are influenced by circumstances, new research shows It is common these days to suggest that millennials have dramatically different preferences than other generations. Whether it is the food they buy or the investments they make, the common consensus is that millennials are fundamentally disrupting a variety of industries due to their divergent preferences. However, such claims have not been explored rigorously and limited data have been used to support those hypotheses. Recently, here at the Sloan School at MIT, my colleague Elizabeth Murphy and I set out to study the car preferences of those between ages 18 and 37 in a rigorous way, and found that millennials may not be expressing a lack of preference or enthusiasm for vehicles, per se. Instead, their car choices may be dominated more by situational forces — such as the economic problems this generation encountered due to the Great Recession or the likelihood that they live in a city as opposed to a suburb. Understanding the true preferences of the millennial generation can provide insight into the future landscape of mobility, and thus provide both industry and policy makers with more information about what business practices and policies to implement. This is particularly true when it comes to our policies related to global warming. Read: Behavioral finance experts say these things can make you richer in old age Car ownership The low vehicle ownership statistics that have been attributed to millennials — the ones we’ve been quietly hoping will solve climate change — are likely just an artifact of the economic conditions and general life cycles they’ve faced. Unfortunately, they do not represent some fundamental difference in their demand for cars and this fact will reverberate long and hard in our battle against climate change. Let’s look at the research and let me explain. Our study focused on two main facets of personal mobility: vehicle ownership, measured by how many vehicles a given household owns, and vehicle usage, measured by annual vehicle miles traveled (VMT). Each of those provides different insights; vehicle ownership gives a better understanding of the market for personal vehicles, while vehicle miles traveled provides insight on vehicle fleet usage as well as environmental footprints. We found that although a simple comparison of average ownership and use would suggest a difference. But that is comparing apples to oranges, because those simple comparisons do not account for differences in age, income and other factors that may drive the demand for mobility. September 11, 2019, Work Session – Item 1