INDUSTRIAL MANAGEMENT, SECOND CYCLE, 30 CREDITS STOCKHOLM SWEDEN 2020,
The Effect of Company Cars on the Travel Behaviour of Employees in Sweden
Påverkan av Förmånsbilar på Anställdas Resbeteende i Sverige
HUSSEIN HAIDARI
The Effect of Company Cars on the Travel Behaviour of Employees in Sweden
by
Hussein Haidari
Master of Science Thesis TRITA-ITM-EX 2021:73
KTH Industrial Engineering and Management
Påverkan av Förmånsbilar på Anställdas Resbeteende i Sverige
av
Hussein Haidari
Examensarbete TRITA-ITM-EX 2021:73
KTH Industriell teknik och management
The Effect of Company Cars on the Travel Behaviour of Employees in Sweden
Hussein Haidari
Approved
2021-03-10
Examiner
Gustav Martinsson
Supervisor
Hans Lööf
Commissioner
-
Contact person
-
Abstract
Company cars are vehicles that are provided to employees owned by companies and
organizations. These cars are provided for work-related travels and are also used for travels with private purposes. The issue is the way that company cars are affecting travel behaviour of employees and their family members, which in turn have implications on climate policies within Europe and even from economic aspects. Therefore, this paper will consider the impact that company cars have on the travel behaviour of employees with company car in Sweden. The thesis methodology takes advantage of both quantitative and qualitative method. Gathered quantitative data from Transport Analysis (TrafikAnalysen) was analyzed by regression analysis and qualitative data is analyzed by PESTEL-framework. The main outcomes of this paper are that company cars change individual’s travel behaviour in Sweden in terms of longer driven kilometers, which include even private travels. This depends on both economic aspects and the fact that "driving a company car" is a part of employee's behaviour now. Besides that, future environmental problems are also consequences of negative impacts of company cars on travel behaviour.
Key-words
Examensarbete TRITA-ITM-EX 2021:73
Påverkan av Förmånsbilar på Anställdas Resbeteende i Sverige
Hussein Haidari
Godkänt
2021-03-10
Examinator
Gustav Martinsson
Handledare
Hans Lööf
Uppdragsgivare
-
Kontaktperson
-
Sammanfattning
Förmånsbilar är fordon som erbjuds från företag till anställda, som ägs av företag och
organisationer. Dessa bilar tillhandahålls för arbetsrelaterade resor och används också för resor med privata ändamål. Problemet är det sättet som företagsbilar påverkar de anställdas och deras familjemedlemmars resbeteende, vilket i sin tur har konsekvenser för klimatpolitiken inom Europa och även från ekonomiska perspektiv. Därför, kommer denna uppsats att ta hänsyn till hur företagsbilar påverkar resbeteendet av anställda som har förmånsbil i Sverige. Uppsatsen utnyttjar både kvantitativ och kvalitativ metod, där kvantitativa data analyseras med hjälp av regressionsanalys som är samlad av TrafikAnalysen och den kvalitativa delen analyseras genom PESTEL-framework. De viktigaste resultaten av denna uppsats är att förmånsbilar förändrar individens resbeteende i form av längre körda kilometer, vilket innebär även resor med privata syften. Detta beror på både ekonomiska aspekter och faktan att ”köra en förmånsbil” har blivit en vana hos de anställda. Dessutom, är framtida miljöproblem också konsekvenser av negativa påverkan som förmånsbilar har på individens resebeteende.
Nyckelord
I would like to express my gratitude to my supervisor, Professor Hans L¨o¨of, who guided me throughout this thesis with his support and efficient insights.
I wish also to show my appreciation to my examiner, Gustav Martinsson for his valuable guidance and advice for finishing this thesis.
Hussein Haidari Stockholm, Mars, 2021
1 Introduction 1
1.1 Background . . . 1
1.1.1 Definition of Company Cars . . . 1
1.1.2 Company Cars and Travel Behaviour . . . 1
1.1.3 Swedish Climate Policies in Transport Sector . . . 2
1.2 Problem formulation . . . 2
1.3 Purpose . . . 3
1.4 Research question . . . 3
1.5 Significance of the study . . . 4
1.6 Delimitation . . . 4
2 Literature Review 5 2.1 Basic Theory of Travel Behaviour . . . 5
2.1.1 Change in travel behaviour from social psychology perspective 5 2.1.2 Theory of planned behaviour and travel behaviour . . . 6
2.2 Definition of Company Cars and their Fleet . . . 7
2.2.1 Definition of Company Cars . . . 7
2.2.2 The Company Cars Fleet . . . 8
2.3 Tax Setting of Company Cars . . . 9
2.3.1 Calculation of Taxation Income . . . 9
2.3.2 Tax Setting of Company Cars in Sweden . . . 10
2.3.3 Bonus-Malus . . . 10
2.4 Sustainability and Sustainable Transport . . . 12
2.4.1 Definition of Sustainability . . . 12
2.4.2 Sustainable Transport . . . 12
2.4.3 Sustainable Transport in Sweden . . . 13
2.5 Demand and Supply . . . 15
3 Theoretical Framework 16 3.1 PESTEL Framework . . . 16
3.2 Application of Theoretical Framework on Qualitative Data . . . 18
3.2.1 Political Factors . . . 18
3.2.2 Economic Factors . . . 19
3.2.3 Socio-cultural Factors . . . 21
3.2.4 Technological Factors . . . 22
3.2.5 Environmental Factors . . . 23
3.2.6 Legislative Factors . . . 24
4 Methodology and Data 25 4.1 Choosing research methodology . . . 25
4.1.1 Quantitative versus Qualitative research . . . 25
4.1.2 Mixed Methods - Quantitative and Qualitative . . . 26
4.1.3 Research Design . . . 26
4.2 Data Collection . . . 27
4.3 Data Analysis . . . 27
4.4 Regression Analysis . . . 33
4.4.1 Multi Linear Regression . . . 33
4.4.2 Logistic Regression . . . 34
4.4.3 Missing Data . . . 34
4.5 Research Hypotheses and Variables . . . 35
5 Empirical Analysis 36 5.1 Swedish Regulations (existing and upcoming) Regarding Company Cars . . . 36
5.1.1 Swedish regulations regarding company cars . . . 36
5.2 Existing Data Regarding Company Cars Used in the Paper . . . 37
6 Results and Discussion 39 6.1 Hypothesis 1 . . . 39
6.2 Result of Hypothesis 1 . . . 40
6.3 Hypothesis 2 . . . 41
6.4 Result of Hypothesis 2 . . . 42
7 Conclusion 48
8 Summary and future work 50
9 Appendix 51
Bibliography 62
Bilagor 65
3.1 PESTEL Framework . . . 17
4.1 Boxplot of H KM, with outliers . . . 30
4.2 Boxplot of H KM, without outliers . . . 31
4.3 Boxplot inculded outliers (Household income). . . 31
4.4 Boxplot after treating outliers (Household income). . . 32
9.1 Plot of Multiple Linear Regression, Standardized Residual . . . 52
9.2 Scatter Plot of Multiple Linear Regression . . . 53
9.3 Histogram containing standard deviation of H KM . . . 53
9.4 Boxplot of H KM, with outliers . . . 54
9.5 Boxplot of H KM, without outliers . . . 54
9.6 Histogram containing standard deviation of ARB KM . . . 55
9.7 Boxplot of ARB KM, with outliers . . . 55
9.8 Boxplot of ARB KM, without outliers . . . 56
9.9 Histogram containing standard deviation of H AREALL . . . 56
9.10 Boxplot of H AREALL, with outliers . . . 57
9.11 Histogram containing standard deviation of household income (HH: Hush˚allsinkomst) . . . 57
9.12 Boxplot inculded outliers (Household income). . . 58
9.13 Boxplot after treating outliers (Household income). . . 58
4.1 Hypothesis 1 - Variables’ abbreviation . . . 28
4.2 Hypothesis 2 - Variables’ abbreviation . . . 28
6.1 Hypothesis 1 - Variables’ abbreviation . . . 40
6.2 Significance table of variables from test of hypothesis 1 . . . 40
6.3 Model summary of the test for hypothesis 1 . . . 40
6.4 Hypothesis 2 - Variables’ abbreviation . . . 41
6.5 Household income, with company cars. . . 42
6.6 Household income, without company cars. . . 42
6.7 Model summary of the test for hypothesis 2 . . . 43
6.8 Classification table . . . 43
6.9 Significance table of variables from test of hypothesis 2 . . . 43
6.10 Average driven kilometer with company car. . . 44
6.11 Average driven kilometer without company car. . . 45
6.12 Number of travels with private purpose in last 3 days. . . 46
9.1 Correlation table with all variables tested from hypothesis 1. . . 51
9.2 Correlation table with all variables tested from hypothesis 2. . . 52
9.3 Household income, with company cars. . . 59
9.4 Household income, without company cars. . . 59
9.5 Average age of people with company cars. . . 60
9.6 Frequency of gender among respondents with company car. . . 60
9.7 Case summary of Binary Logistic Regression. . . 60
9.8 Average driven kilometer with company car. . . 60
9.9 Average driven kilometer without company car. . . 61
9.10 Number of travels with private purpose in last 3 days. . . 61
EEA European Environment Agency OECD Organization for Economic Cooperation and Development
USC University of Southern California
VTI Statens v¨ag- och transportforskningsinstitut
UK United Kingdom
UK United Nation
EDA Exploratory Data Analysis
KM Kilometer
L Liter
SPSS Statistical Package for Social Sciences
MAR Missing at random
MCAR Missing completely at random
MNAR Missing not at random
SEK Swedish Krona
Introduction
This chapter incorporates the background of the problem being studied, which is followed by the problem formulation, purpose and research question of this paper.
Furthermore, the chapter also contains delimitation of the study.
1.1 Background
1.1.1 Definition of Company Cars
Companies usually give the opportunity of driving their cars privately to their em- ployees. These cars are ranked as benefit, are taxable and allow the employee to use the car for personal uses. (Skatteverket, 2019) Another definition of company car cited in a study done by Ramaekers et al.(2010) from Cornelis et al.(2007) is:
”A vehicle whose initial cost is supported by the employer, which is awarded to an employee for his personal, professional and/or private trips, and which can be used by the employee without the authorization of his employer”. (Ramaekers et al., 2010) These are passenger light-duty vehicles, which can be either leased or owned by employer or companies. (Economics et al., 2010)
The personal use of these cars are not related to the duties that the employee has. Furthermore, the employer’s motivation may be providing the employee with a car for business purposes, but in many situations the employee has the right to use the car for personal uses. (Harding, 2014) Additionally, family members of these employees are sometimes allowed as drivers of company cars. (Shiftan, Albert, and Keinan, 2012)
1.1.2 Company Cars and Travel Behaviour
Company cars are common in whole Europe, statistics has shown that 50 % of the all new cars are company cars, where there are also arguments regarding distor-
tionary taxation of these cars. (Economics et al., 2010) Furthermore, these cars are usually equipped with fuel card, which in turn decreases the cost of using a company car even more in the eyes of the employee. This is considered as an oppor- tunity from the employee viewpoint and captured as a ”free” transfer mode, that will automatically impact the employees’ travel behaviour and their choice of mode of travel. (Ramaekers et al., 2010) The reduced price of owning a company car may also lead to driving more privately than what the household did before and even cause increased car ownership. (Guti´errez-i-Puigarnau and Van Ommeren, 2011) Therefore, according to studies, those households who posses a company car travel almost 50 % more than households without company car. (Harding, 2014) Besides that, increased car ownership can lead to increased transport demand, further en- vironmental issues and technology lock-in. Additionally, studies have shown that factors such as family size, high income and rural household location impact and increase demand of transport. (Metzler, Humpe, and G¨ossling, 2019) A study done in Sweden shows also that 80 % of company car drivers are men and these cars are mostly offered to senior managers, who usually have higher income compared to other employees. Moreover, this study shows that company cars for the most part are fossil fueled, even if the proportion of environmental friendly cars are higher among newly registered privately owned cars. (Schnurr, Olsson, and Andersson, 2019)
1.1.3 Swedish Climate Policies in Transport Sector
Swedish climate policy Council highlights that, carbon dioxide emissions from in- ternal transport should be reduced by 70 % until 2030 compared to 2010. However, based on Swedish climate policy council existing climate policies will only take Swe- den half-way of this goal. More initiatives need to be taken, if Sweden really has aimed for net zero greenhouse gas emissions by 2045. (SwedishClimatePolicyCoun- cil, 2019) Looking at transport sector, vehicles are becoming more energy efficient but changing travel behaviour is also needed to achieve the goal and a move to- wards a more sustainable transport. (Schnurr, Olsson, and Andersson, 2019) Since, transport sector within Europe stands for 27% of carbon dioxide emissions (EEA, 2019) and 70% of that is road-related. (EuropeanCommission, 2016)
1.2 Problem formulation
Company cars are being used more than private cars according to studies outside of Sweden, which will cause in more carbon dioxide emissions due to economic bene- fits and more important is that it is changing human’s travel behaviour. (Harding, 2014) This will additionally lead to increased car ownership, which gives also rise to further environmental issues and builds negative driving habits in those possessing company cars. (Economics et al., 2010) Therefore, it is important to identify how
company cars are changing travel behaviour of these employees and which segment of people are using these cars in Sweden for being able to take actions. Besides that, study of company cars really needs to be done at this time, while it is difficult to combine them with the set environmental goals by government. (Governmentof- Sweden, 2019) So, the main problem is that company cars are changing the travel behaviour of people negatively and the focus will be on how their behaviour is changed by owning a company car and what are the consequences.
1.3 Purpose
The purpose of this paper is to investigate the impact that company cars have on travel behaviour of employees in Sweden, since currently there is not enough literature in this field to make the society aware of this issue and the consequences regarding company cars. Besides that, there are almost similar studies done outside of Sweden which show the negative impact of company cars on the employees’ travel behaviour. Therefore, this study will be helpful for scientific knowledge within this field, also company cars and the changed travel behaviour of employees in Sweden.
This study will qualitatively investigate the impact that company cars have on travel behaviour of employees. Besides that, the study will also be quantitative, in order to characterize the demographic characteristics that lead to a changed behaviour, also to investigate which segment of people are mainly using company cars. This can also be helpful for government to know and identify which segment of society are using mostly these type of cars with respect to their future regulations and possible upcoming implementation. Since, government want to take a look into regulations regarding company cars, this paper can be also helpful even there.
1.4 Research question
According to the background and the problem formulation and to be able to achieve the purpose of the paper the research question of this study is:
• How does company cars affect the travel behaviour of employees in Sweden and what are the consequences, both from behavioural aspect and environ- mental aspect?
1.5 Significance of the study
Considering the consequences of widespread of company cars and the way they impact on travel behaviour of employees investigated and mentioned in former lit- erature studies around the world, a similar study is needed in Sweden. Not only to investigate the problem for being at the same level as other countries in this field of research, but also this will be needed since it has been paid less attention to this area looking at existing literature compared to published literature within Europe.
In addition, Swedish government has mentioned the issue of tax setting of company cars in their new climate action plan in 2019. (GovernmentofSweden, 2019) How- ever, this study is not specifically investigating the problem through tax setting perspective, but the paper may still be helpful in their decision making in the area of company cars and how these cars change one’s travel behaviour. Besides that, company cars have their impact on environment, which is also one of the reasons why government want to investigate the issue of company cars and the tax setting related to them. (Harding, 2014)
1.6 Delimitation
This study will look into how travel behaviour of employees are changed by possess- ing a company car in Sweden. Since, the data which is available at VTI has targeted Sweden. Additionally, the focus is on company cars which are petrol powered or driven by diesel, since almost more than 80 % of company cars in the data used in this study are driven either by petrol or diesel.
Literature Review
In following chapter, firstly literature regards changed behaviour is reviewed, then basic theory of travel behaviour is to go further and describe how someone’s travel behaviour could be affected. Additionally, the chapter will discuss company car’s definition, as well as fleet of company car. Moreover, the chapter will look into transport policy in Sweden and sustainable transport. Lastly, demand and cost model is discussed to capture a big picture of this model and discover how cost and demand changes in relation to each other for being able to discuss cost and demand related to company cars later in the paper.
2.1 Basic Theory of Travel Behaviour
The most logical and accepted theory for describing travel behaviour is apparently the objective of maximizing the net benefit of a travel by an individual. In this theory, benefit is compared to the total costs of a travel, which means generalised costs. Benefit has a dependence to the purpose of activities done at the destination of travel, while generalised total costs of travel is defined as time, money spent and the effort on the trip. Besides that, even if benefit of the travel is the reason behind of the people’s travel, but it will not be helpful in distinguishing why they choose a specific mode of travel prior to other sort of travel modes. (Scheiner, 2018)
2.1.1 Change in travel behaviour from social psychology perspective Travel behaviour is modelled differently in many studies according to a various range of variables. It has been e.g. according to situational or personal factors. Sit- uational factor refers to accessibility, which means land-use, temporal component and transporter. While personal factors are those such as, sociodeographics and psychological variables. It was at 1970s that psychological variables were studied and in 1990s the passion for studying soft factors such as personality, lifestyle, at-
titudes and values began. The goal with these studies was to discover and capture a better comprehension of their role for choosing mode of travel or the destination.
(Scheiner, 2018) Looking to the travel behaviour and using a car from social psy- chology perspective, symbolic-affective motivations such as social comparisons and pleasure are also as important as traditional motivations such as cost and money for ownership of a car. (Steg, Vlek, and Slotegraaf, 2001) Besides that, role of personal social network is also a significant factor in travel behaviour. One’s private rela- tionships with colleagues, children, parents and spouses makes that persons decision making context. (Scheiner, 2018) According to Gatersleben and Uzzell (2003), af- fective motives can overcome individual’s cognitive evaluations, when it comes to the choice of travel mode. (Steg, Vlek, and Slotegraaf, 2001)
2.1.2 Theory of planned behaviour and travel behaviour
This theory is an extension of another theory, which is called reasoned action. In the theory of planned behaviour the focus is on the intention of the individual for performing a certain behaviour. The purpose is to achieve motivational factors for being able to affect a certain behaviour. Besides that, grade of intention will decide the chance of performance of given behaviour, the more the intention is the higher the chance for performance will be. (Ajzen et al., 1991) Jillian Anable (2005), claims that this theory is used as a psychological theory for attitude behaviour of an individual for choosing the mode of travel. (Anable, 2005) However, Verplanken et al. (1994) look from a different perspective to the choice of mode of travel and connect it to the habitual factor and claim that the travel behaviour is not always connected to evaluation of existing options. (Verplanken et al., 1994)
2.2 Definition of Company Cars and their Fleet
2.2.1 Definition of Company Cars
It is also important to know what a company car is. Company cars are vehicles that are offered from employer to employees, which can be awarded to the personal either for professional and/or private trips. The private trips can be done without necessity for authorization of employer. It is important to know that the employer is the one who pays the initial costs of a company car. (Ramaekers et al., 2010) These are passenger light-duty vehicles, which can be either leased or owned by employer or companies. (Economics et al., 2010) It is not only the employee who is allowed to use a company car with private purposes. In some cases, family members of the employee are also allowed to drive the car as additional drivers of the car.
(Shiftan, Albert, and Keinan, 2012) Company cars are also called as fringe benefit cars, which refers to fringe benefit connected to these cars. The personal use of the car has no connection to the duties that employee has. However, the purpose of the employer may actually is providing the employees with a car in travels with business motivation. (Harding, 2014)
Moving forward a wider definition of company cars in Sweden by Swedish tax agency, these cars are divided in three subcategories. These different categories of company cars in Sweden are either due to differences in terms of usage or the structure of employee financing concerning deduction of wages. Staff cars, denoted as ”personbil” in Sweden are cars which are used both at work and travels with private purposes. These cars are represented as cost-neutral option for the com- pany, since cost of these cars are partially or totally paid by the employee. This will be paid through the employee’s gross salary. The benefit behind this sort of cars for employee will be the price negotiation that employer has with car dealer, that decrease the costs that are assumed to be paid by employee. The next subcategory are official cars, called ”tj¨anstebil” in Swedish. These are cars that are completely used at work with work-related opportunities, but some limited exceptions. The private use of the car should not exceed 100 miles per year and in addition number of cases that car is used for private purposes should not exceed 10 in a year. The last subcategory, which is the topic of interest in this study is company cars or fringe benefit cars, called ”f¨orm˚ansbilar”. These are cars that can be used both for work and privately. (Skatteverket, 2019)
The definition of company cars, according to Swedish agency is almost the same as mentioned above. It is a car, which gives the opportunity of being used privately to the employee. According to tax agency this cars are taxable, since they are ranked as benefit and allow the employee to use the car even in travels with personal pur- poses. (Skatteverket, 2019) Additionally, around 50 % of newly registered cars in Sweden are company cars. (Harding, 2014)
2.2.2 The Company Cars Fleet
In 2008, approximately 50 % of new car purchases were company cars. (Economics et al., 2010) The European car fleet at the same year was around 20 million com- pany cars. (Shiftan, Albert, and Keinan, 2012) In a study conducted at year 2010, Sweden had a higher share of company cars fleet, which showed a 10 % growth. This means that 60 % of new passenger car registrations was company cars, that was almost equal to Germany. (Economics et al., 2010) However, a later study showed an estimation of 50 % for new registered passenger cars as company cars. (Harding, 2014) It is important to mention that, as it is reported in a study conducted in Swe- den company cars are normally heavier and considerably more fossil driven. The same study has shown that 80 % of company car drivers are men. (Schnurr, Olsson, and Andersson, 2019) Transport sector in Sweden has also one of the heaviest car fleet in Europa, which is the reason behind high CO2 emissions and fuel consump- tion as well. (Hugosson and Algers, 2012) According to the Swedish Environmental Protection Agency, the European goals, an average CO2 emission per car less than of 95g/km is important to be considered and can not be underestimated. This is significant to remind, since the transport sector of Sweden in 2016 stood for more than 30 % of all national carbon dioxide emissions. (SwedishEnvironmentalProtec- tionAgency, 2017)
2.3 Tax Setting of Company Cars
Applied personal income tax rules to employees are of big importance, both fiscally and environmentally in regard to transport. Therefore, two main characteristics are significant to be treated in proper way, first the benefit of usage of company cars for maintaining private needs and treatment of transportation expenses. Transport stands for 27 % of carbon dioxide emissions in most OECD (Organization for Eco- nomic and Cooperation Development) countries, which in turns leads to more local air pollution. Besides that, tax setting on company cars and commuting expenses will also affect both the mode of travel and how much the employees travel actually.
For instance, if taxable benefit related to private usage of company cars in longer driven distances does not vary, then incentives for travels with greater distances will be made in such employees. This will also be a risk for climate by increasing air emissions and other costs. Thus, deduction of costs of commuting will also raise the incentives of living in longer distances from work, which finally results in higher consumption of fuels. (Harding, 2014)
2.3.1 Calculation of Taxation Income
Regarding the calculation of the taxable income from the private use of a company car, the company car’s price will be used as a criteria. In this method, the costs related to the owning or leasing a car will be measured and financing costs will also be added. Actually, a proportion of the car price will be included in the employee’s taxable income, considered as the value which they receive by using these company cars without leasing or purchasing. The issue here is that the price of the same car may differ in different countries, which in turn may lead to non-identical taxable benefit to the individual based on the country that they are taxed. (Harding, 2014) In most European countries the tax will be calculated based on the purchase price of the car, but not private use of the car. (Guti´errez-i-Puigarnau and Van Ommeren, 2011). In calculation of the value of the car based on the costs of the car when it was purchased, list price of the car or the fair-market value is considered. This means that, the cost price of the car will somehow be less than list price of the car, as a consequence of volume of car purchases and the power that company may has in bargaining. (Harding, 2014)
There are several factors that decide the impact of company cars tax setting on environmental outcomes. Factors such as, being the other alternative transports used by the household or if the company car is substitute to an already existing vehicle and if the provision of company car is affecting and increasing the total distance driven in these cars, both individually and in household. In fact, there is proof that shows personal use of the company cars are often more than work-related
cases. (Harding, 2014) This can also be justified by the fact that company car’s private use is not really taxed fairly and the rate is low, so that the implicit price for household will be lower than the market price. (Guti´errez-i-Puigarnau and Van Ommeren, 2011)
2.3.2 Tax Setting of Company Cars in Sweden
In Sweden, using the company car privately will be considered as benefit and is tax- able as well. Company cars in Sweden, can also be used both at work and privately.
It is tax authorities in Sweden, which is called ”Skatteverket” that decide how the company car’s taxable income will be calculated. The authority has a standard model, which is also based on the new price of the car. But, there are different rules regarding company cars older than 6 years and environmentally friendly cars, t.ex.
list prices for plug-in electric company cars are considered lower than their market price, while calculating the taxable income of employees. (Skatteverket, 2019) The Swedish government in their new climate action plan has decided to find a proper way of calculating benefit value of company car, which later will be added to the employee’s taxable income for achieving a more natural taxation system.
(SwedishClimatePolicyCouncil, 2019) This will be a good point, since fringe ben- efits value of company cars in most countries are counted at a lower rate, that at the end does not really reflect the true costs of these cars, (Shiftan, Albert, and Keinan, 2012) considering the heavy and considerably more fossil driven company cars in Sweden. (Schnurr, Olsson, and Andersson, 2019)
2.3.3 Bonus-Malus
Bonus-Malus system is a system in taxation of the cars, which means giving bonus to those cars with low carbon dioxide emissions according to Swedish Tax Agency.
On the contrary, those cars which have relatively high carbon dioxide emission will be responsible to pay more in tax. (Skatteverket, 2019)
However, it should not be neglected that, application of Bonus-Malus system in taxation of fringe benefits of company cars will have a vital role for achieving the goal of reduced GHG emission. (d’Haultfoeuille, Givord, and Boutin, 2014) This is important, since Bonus-Malus system will affect calculation of fringe benefits for company cars as well. (Skatteverket, 2019) A feebate can be seen as a policy tool, that is designed to encourage the individual to increase the incentives of internaliz- ing the externalities of a specific goods. The term is a conjunction or combination of two other words, terms ”fee” and ”rebate”. This policy instrument has been used in many countries such as France, Austria, regionally in Belgium and is under the process of discussion in other European countries. (d’Haultfoeuille, Givord, and
Boutin, 2014) Swedish government has also decided to implement new regulations and small changes in Bonus-Malus in 2021. (Finansdepartementet, 2020)
In Sweden, Bonus-Malus system was applied from 1 July 2018 from the beginning, to see how the market is reacting to this system. (Skatteverket, 2019) However, an evaluation of Bonus-Malus feebate in France has not showed positive effects. This could be related to the high level and generous rebates. Adverse behaviour effects is another effect of using this policy instrument in French. This is justified by the fact that the number of new car increased with 13 %, while France experienced a downturn in their economy. (d’Haultfoeuille, Givord, and Boutin, 2014)
2.4 Sustainability and Sustainable Transport
2.4.1 Definition of Sustainability
The primary components of sustainability appeared at 1972 globally in UN (United Nation) Conference on the Human Environment i Stockholm. (Kenworthy and Newman, 2013) There are different definitions regarding sustainability, sustainable development and other concepts associated to that. The fundamental definition of sustainability which is simple is: ”a sustainable system is one which survives or persists.”. This means to keep away from collapses and disruption for not being wiped away from the system or market. (Costanza and Patten, 1995)
Sustainable development according to the World Resource Institute and some others id defined as: ”development strategy which manages all assets-natural and human resources, as well as financial and physical assets-for increasing wealth and well- being”. (Brown et al., 1987) Additionally, looking at the worldwide context of sustainability, any attempt and improvement either economic or socially, must be without any potential harm to the environment. (Kenworthy and Newman, 2013) Apart from all mentioned above, in order for any development to be sustainable, it should be in a way to provide the present needs, while do not put the future gen- eration’s ability for maintaining their own needs in danger. (Greene and Wegener, 1997)
Currently, companies and organizations are striving toward sustainable solutions and investing in them, because of the uncertainties that exist regarding the future.
The uncertainty can come both from customer or the government side. Companies are not certain about the new laws and regulations which will be set in future by government and neither are secured if customers are going to pay for their upcoming sustainable solutions. (Geels, 2010) But, studies have also shown that those estab- lished firms which have not considered future dominant solutions and technologies are normally abolished from the market. (Christensen, 1997) Being first within sus- tainable solutions can also have advantages, such as having benefit as first mover and get advantage by establishing a desired position at market. Moreover, these leaders have the opportunity to influence the politicians and gain advantage there as well. (Geels, 2010)
2.4.2 Sustainable Transport
Looking at the transport globally, there is worldwide agreement that claims the current direction of the whole world transport is not sustainable. Therefore, some basic changes from different perspectives such as financing, technology or operation and design need to be implemented. (Greene and Wegener, 1997) When it comes
to development and sustainability, transport has a vital importance. All activities, such as education, jobs, health and access to other facilities is not possible without access to a proper transport and therefore the life’s quality will suffer. But, improp- erly outlines within transport strategies may lead to services and networks that are not able to serve people correctly, harm the environment and do not consider the capacity of public finance. (Gwilliam and Shalizi, 1996) Besides that, economy and environment can not any more be treated as unrelated systems. They can neither be independent of each other or competing. Therefore, economic and environmental policies are rather living side by side and are symbiotic, therefore they should be designed in away to complete and underpin each other. (Kenworthy and Newman, 2013) The transport minister of European Commission has also remarked a multi- dimensional definition for sustainable transport, which is a transport system that is easy to access, affordable for people, aligned with environmental policies and finally favourable for economy of the society. (Gudmundsson, 2004)
2.4.3 Sustainable Transport in Sweden
Transport Analysis a Swedish agency in Sweden, is in charge for following up the transport policy goals. Their goal has a main body which is further divided in two other categories, functional and an impact objective.
The transport policy goals of Sweden were presented as Goals for future travel and transport in the government bill, which was approved by Swedish parliament in 2009. The Swedish policy goals are based on one primary goal and two secondary goals. While the first goal is:
• ”The objective of transport policy is to ensure the economically efficient and sustainable provision of transport services for people and business throughout the country.”
Secondary goals which are the ”functional goal” and the ”impact objective” goal are as following:
1. ”The design, function and use of the transport system will contribute to pro- vide everyone with basic accessibility, of good quality and functionality, and to the development capacity throughout the country. The transport system will be gender equal, meeting the transport needs of both women and men equally.”
2. ”The design, function and utilisation of the transport system are to be adapted in such a way that no one is killed or seriously injured in traffic. The design of the transport system is also to help to achieve the overarching generational goal for the environment and the environmental quality objectives, and to contribute to improved health.” (Trafikanalysen, 2018)
The general goal is to make sure that the transport system is both sustainable and economically efficient for both citizen and businesses within the country. Within secondary goals, the functional goal requires that, design, function and use of the transport system shall contribute to providing everyone with basic accessibility with good functionality and quality and contribute to development power throughout the country. The transport system must be equal, which means giving equally respond to the transport needs of both women and men. The second category entails a design, function and use of the transport system, which is adapted so that no one is killed or seriously injured. Besides that, it also should contribute to the overall generational goal for the environment, environmental quality goals and improved health. (Trafikanalys, 2019)
2.5 Demand and Supply
Like all other existing laws in different area, there are also proven laws within economics as well. There are also three preliminary laws within Supply and Demand:
• At the current price, if the demand pass supply, then the price will increase.
Contrariwise, if supply pass demand the price will experience a decrease in- stead.
• An increased price, will eventually lead to a fall in demand and a rise in supply. On the contrary, a fill in price will cause a fall in supply and increase the demand as a consequence.
• The price is eager to the point, where both demand and supply are equal.
The third law has a vital importance and can be also considered as an by- product of those two former laws. If supposing the demand is more than supply, then the price will rise and as a result the supply will increase and become larger to compensate this and the demand will fall down. This will finally lessen the excess of demand. If after all these processes there is still excess of demand, then the same steps will be repeated until the overbalance of demand is diminished totally by the adjustment that price does. (Henderson, 1922)
The supply and demand regarding fringe benefits is a popular discussion in many economic textbooks. But, not that much popular in empirical literature. This is considerably important, since these fringe benefit taxation are shown to have strongly welfare connections, e.g. free parking or private usage of company cars.
(Guti´errez-i-Puigarnau and Van Ommeren, 2011)
Furthermore, supply and demand is also crucial within reducing negative environ- mental impact on transport . There are generally three policies regarding negative environmental aspects of transport, which can be effective in diminishing the neg- ative environmental effect of transport, transport technology, transport supply and transport demand. This means that, the negative environmental impact of transport is considerably dependent to the technology. Transport demand can be controlled or reduced at its start point. Physical separation of human activities is the reason behind increased transport demand, which by self clarify why transport supply is needed.(Greene and Wegener, 1997)
Theoretical Framework
This chapter, ”theoretical background” will provide the paper with the theoreti- cal framework that is going to help the paper to analyze the data qualitatively.
The PESTEL framework will serve the paper for analyzing the data qualitatively, while the quantitative data of the study will take advantage of Regression models described later in the chapter ”Methodology and Data” as an analytical framework.
3.1 PESTEL Framework
PESTEL with its six macro business environmental perspectives (Political, Eco- nomic, Socio-cultural, Technological, Environmental and Legal) is a framework and a tool for organizations, companies and businesses, which can be used with its two functions. Firstly, this framework will provide the organization to identify the en- vironment, which they operate. The other basic function is that PESTEL prepare the information and data, which is needed for company for being able to predict the opportunities and conditions that the organization may meet in the future. (Y¨uksel, 2012)
Figure 3.1: PESTEL Framework
The primary form of PESTEL was first realized by Aguilar as ETPS (economic, technical, political, and social). This was later modified to ETPSE instead, where the environmental aspect joined other factors with the purpose of investigating the environmental changes as well. Finally, in the 1980s the ”legal” factor was also added to this model and PESTEL analysis began to be a proper tool and being used in different areas. (Y¨uksel, 2012) In a thematic analysis, the purpose is to find the patterns and themes that are observed with qualitative data. (Maguire and Delahunt, 2017) PESTEL as a tool for environmental analysis of an organization plays a vital role in developing the organization or business in the way of identifying the threats and opportunities. (Y¨uksel, 2012)
3.2 Application of Theoretical Framework on Qualitative Data
In the following part, studies within changed behaviour of employees have been explored and analyzed. They are categorized and divided into separate parts by applying PESTLE framework as a theoretical framework. Each category analyzes the data within travel changed behaviour.
3.2.1 Political Factors
Another issue is distortionary taxes of company cars, which is also an important topic within political field of European countries. Taxation of company cars was already known as ditortionary in the 1980s. (Guti´errez-i-Puigarnau and Van Om- meren, 2011) In Sweden, laws regarding taxation of company cars changed once in 1977. The motivation behind this change was to decrease private driving of this cars.
According to former policy, the one who drove a company car was free from paying tax on the free fuel for private travels. This means that those who received free fuel for private driving, will now be also taxed for the free fuel. (Naturv˚ardsverket, 2004) Looking at the company car tax policy in England, they have changed their policy of tax treatment of company cars after 2002. Their initial tax treatment policy of company car was based on distance driven, which was shifted to a emission-based system. The purpose with this shift was to inspire more people to use environmen- tally friendly cars instead and in this way reduce the produced carbon emissions.
(Scott, Currie, and Tivendale, 2012)
There are other economic aspects of company cars such as , lost revenue of employer- provided car parking, that can be accounted as benefit. The issue needs a political acceptance and a reform in policies from politician, in order to be effective. (Scott, Currie, and Tivendale, 2012) These policies can either be for cutting pollution, economic or environmental purposes, such as entry price implemented within city centers, which is also implemented in Stockholm or even in London. (Economics et al., 2010)
In a study conducted in London, ordered by authorities from transport sector, con- sidering some soft policy measures such as, workplace and school travel plans, public transport information etc., showed that studying these policies regarding travel be- haviour of people may lead to 14 % decreased traffic in peak-hour within non-urban, 21 % within urban areas and totally 11 % cut in national traffic. So, this also was dependent to how much government and local authorities will pay attention to this problem. (Goodwin et al., 2004) According to a study done about company cars in Germany, the government has a broad range of policies within transport sector, which does not match with the public opinion and scientific opinions or there is a difference between planned programs and their implementations. (Metzler, Humpe,
and G¨ossling, 2019) However a study on choice of car model in 2016 shows that, policies such as five-year tax exemption for ”Green Cars” and ”Super Green Cars”
premium have not assisted to change the choice of people regarding private cars.
(Engstr¨om, Algers, and Hugosson, 2019)
3.2.2 Economic Factors
Usually, it is common to selectively offer company cars to employees with the pur- pose of substituting it as a part of employee’s wage, which actually is considered as a tool for handling wage increases. This theory was initially implemented in UK (United Kingdom) as a policy to limit the wage increases in that country. (De Borger and Wuyts, 2011)
In the book ”Labour Market, Commuting and Company Cars”, Eva Guti´errez-i- puigarnau points that, the fact of having access to a cheaper and more time efficient commuting alternative has stimulated suburbanization, which in turn automatically means longer driven kilometers by the car owned to work. (Puigarnau, 2011) Look- ing at the problem from another aspect, some employees are offered company cars at the early stage in their career, namely the day they are recruited. This will also be an impact that employers can directly have on employees, since at this stage the employee will definitely contemplate both the benefits and disadvantages of cash against owning a company car. (Scott, Currie, and Tivendale, 2012) Additionally, employees who are in possession of company cars have no economic motivation for limiting their fuel consumption, since such costs are covered by the employer.
(Graus and Worrell, 2008)
Furthermore, the taxation of company cars is also a topic that has been argued due to its distortionary. This is due to the fact that in many European countries these cars are being taxed based on their purchased price and not the private driven dis- tance by the car. The principle of taxing company cars which is at a lower level has lead to incentive to possess company cars, since the expenses of driving a company car in the household are not at all at the same level of its market price.(Guti´errez- i-Puigarnau and Van Ommeren, 2011) Therefore, according to a study in Sweden company cars are extra beneficial due to the basis of taxation calculation at a lower rate compared to the market value. (Schnurr, Olsson, and Andersson, 2019) The reason behind this is that employers pay those initial costs of the company cars used by employees due to their interest in company cars. The interest comes from the fact that employers have the incentive to pay less tax on their labour forces’
salary by offering these company cars and fiscal benefit of them. (Ramaekers et al., 2010) If the employer had not provided the employee with a company car, then the employer needed to spend more money in terms of direct wages to the employee to provide en equivalent increase in the empolyee’s income. (Shiftan, Albert, and
Keinan, 2012)
Besides that, taxation of company cars are depended on the price of the car being purchased in most of the European countries, but not usually on the level of usage of the car with personal purposes. (Economics et al., 2010) Looking at the demand and supply side of the market, the fiscal advantageous of company cars is also a factor which has made it popular for both sides. (De Borger and Wuyts, 2011) Moreover, the unjustified taxation of company car, which in turns favours both employer and employees has made these company cars more desirable for people.
(Schnurr, Olsson, and Andersson, 2019) Even if the taxation of company cars was natural in relation to cash salary, there are other social cost that need to be also considered, which are a result of increased company cars, such as congestion, acci- dents and air emissions. (Harding, 2014)
Looking at the problem from employers’ view, providing the employees by com- pany cars doesn’t escalate the social security contributions, as those other sorts of employees’ provisions do. From employees’ perspective, that part of increment in their taxable income due to utilization of a company car is much less than the costs that are supposed to be paid by employer for their private travels, since the relevant tax base rates are set lower than usual in this case. (Economics et al., 2010) Ac- cording to findings by Ommeren et al. (2013), existing taxation system of company cars leads to three important consumer behavioural consequences, which generate adverse welfare effects, that are: (1) increased demand for company cars that are more expensive, (2) low costs that result in more privately travel and (3) increased car ownership. This concerns not only the employers, but also their households as well. (Ommeren and Guti´errez-i-Puigarnau, 2013)
3.2.3 Socio-cultural Factors
Based on an interview performed in 2019 in Sweden among ten companies from different branches, it is relatively common to offer company cars to the senior man- agers. Most of them do not feel that this system can be abolished, but there are many who want to stop this sort of system and even offer other form of mobility to a broader spectrum of employees. At the same time, many of employers have noticed that offering a company car is less attractive for employees than what it used to be before. (Schnurr, Olsson, and Andersson, 2019) Another study in Germany has shown that, the average age that company cars have is 4.36 years, while passenger cars which are used as private cars have a average age of 7.63. This shows the substantial age difference of 3.27 years between these two categories. The study has also investigated the average monthly driven kilometers, which indicates that com- pany cars are in average driven twice private cars, revealing 2056 km in company cars compared to 1069 km in private cars. There is another considerable point from this study that the owner of company drives less than the employees in average, 18792 km to 29856 km each year. (Metzler, Humpe, and G¨ossling, 2019)
A study done by Cornelis et al. in 2007 the yearly driven kilometers covered by company cars are bigger that of private cars. The investigation of this study which had Belgium as a target shows that, the average annual mileage covered by respon- dents without company cars was 19700, while the number is 32500 km for the people with company cars included in the survey. Only a quarter of those with company cars had an average mileage under 20000 km per year, whereas the result is 2 out of three in private cars case. (Cornelis et al., 2007) Looking into the paper man- aged by Copenhagen Economics, documentations from Netherlands and Belgium approve that only 20-30 percent of these company cars are used at work and the rest is thereby private. (Economics et al., 2010)
In addition to, economic benefits of company cars and the fact that company cars in Sweden are usually offered to high ranked positions in companies, it can be seen also as something desirable and rewarding. Additionally, since cars are a status symbol in the Swedish society, this can be retained or reinforced even more by of- fering company cars to employees with managerial position. (Schnurr, Olsson, and Andersson, 2019) There are other negative social outcomes regarding company cars, such as long distance commuting. The fact of offering company cars, which is at a higher rate of compensation will be a proper option for employees to accept longer commute time. In UK, companies have used this option to show the jobs more attractive to the employees, which in turns results in negative social and environ- mental problems. The increased demand of transport is one of them, that will also bring up new problems later. (Metzler, Humpe, and G¨ossling, 2019) Additionally, demands for travel is socio-demographic, which can both determine and influence both the mode and volume of transport. (Bjørnland, 1994)
3.2.4 Technological Factors
According to Harding 2014, 50 % of newly registered passenger cars are company cars. (Harding, 2014) To compare this amount of company cars with Europe, a study done in Copenhagen in 2008 claims that, within M1 category 50.5 % of the the total 11.8 million passenger car registered over all 18 EU Member States are registered as company cars. (Economics et al., 2010)
Meltzer et al. (2019), in a study conducted regarding Germany claim that, in order to diminish negative environmental issues of company cars and moving forward in- ternational goals regarding GHG, governments should implement new sustainable technologies. Besides that, they mention that benefits of company cars are out of date and are not aligned with automotive industry. These solutions and technolo- gies within transport sector can be helpful for social welfare also, such as solutions within propulsion technology, either battery electric vehicles or plug-in hybrid vehi- cles. (Metzler, Humpe, and G¨ossling, 2019) Furthermore, the principal of company cars are in a way that they will be sold after a while being used and have their impact on the future of structure of all vehicle fleet. (Scott, Currie, and Tivendale, 2012)
Clearly, the topic of energy and emission is highly significant for government and their decision making. Since the transport sector is a big part of released CO2 emissions as well as a large source of energy consumption, the focus on this sector is therefore additional. Therefore, the road transport sector needs to take action regarding their emissions. Recent intentionally higher fuel prices has led to a change in the trend of people towards driving a more fuel efficient car. Besides that, com- panies who produces these cars have started to make the engines lighter by stepping forward and using plastic and aluminium in the engines. (Scott, Currie, and Tiven- dale, 2012)
3.2.5 Environmental Factors
The negative environmental impacts related to cars are those involved in the manu- facturing processes of vehicles, where the car is produced, for instance reduction of raw materials and resources, emissions produces under the manufacturing processes and other sort of pollution; and those related to the utilization of the vehicles, in the form of increased emissions of carbon dioxide. Company car tax setting may also impact these factors either directly by tax setting which is related to use, costs and fuel efficiency or indirectly, by other factors such as size, engine and age of the car, factors that may impact the environmental outcomes. (Harding, 2014) In a study that investigated and compared the greenhouse gas (GHG) emissions of company cars versus private cars, the result showed that the average rate of fuel consumption for those who drive private cars is 830 liter (L) gasoline and 1157 L diesel each year, while the same number for people who drive company cars is 1170 L gasoline and 2361 L diesel in a year. (Metzler, Humpe, and G¨ossling, 2019) In another study conducted in Sweden, based on interviewee’s statement, there are different policies between cars which are bought for the organization it self and company cars. In their company, while buying or leasing cars for the organization itself policy of en- ergy efficient and fossil free cars is considered, but the same policy is not considered regarding buying or leasing company cars. (Schnurr, Olsson, and Andersson, 2019) Another study in Germany has shown that the factor “rural area” in an analy- sis is a factor that drive up the incitement of transportation in employees, where a larger part of that is based on personal purposes. (Metzler, Humpe, and G¨ossling, 2019) In Netherlands, 11 % of passenger car fleet are consisted of company cars, but these company cars lonely consume 21 % of all energy consumption allocated to pas- senger cars. This is due to the larger distance that these company cars drive and the face that these cars are larger than private cars. (Graus and Worrell, 2008) Besides that, possessing company cars through the company will motivate the employees for car ownership, builds new driving habits in them and consequently environmental problems will be provoked by transport system in this way. (Economics et al., 2010) According to a study conducted regarding plug-in electric vehicles in Netherlands, the welfare losses through beneficial tax treatment of these cars are actually com- pletely compensated by their environmental advantages. In addition, the study shows that there are even more external benefits with these electric cars, such as technological innovations and going along with the future environmental benefits, in case these are adopted in the company car market. (Dimitropoulos et al., 2016)
3.2.6 Legislative Factors
A change of tax setting which can be based on number of cars owned, the efficiency of the fuel used and finally the distance driven by the car has an effect on the re- spond from employees, employers and employees’ household. (Harding, 2014) Travels which are related to the business or work, are usually treated as a part of the production, therefore they can be subtracted from taxation. On the con- trary, travels that are not related to the work and done by company cars, which create benefit for the employee, while it has no production purpose in it are taxable.
(Metzler, Humpe, and G¨ossling, 2019) Harding (2014) reacts also on the same issue and claims that, personal income taxes are generally paid on income and personal expenses provided by the employer have to be accounted as taxable income and can not be deducted. The expenses such as insurance, parking, fuel, registration of the car and other operating expenses are usually covered by employer in the case of company cars, which does not consider the purpose of the travels. (Harding, 2014) Another issue in taxation of personal income is that the system often has one un- varying basis for taxation and it does not change based on type of employment compensation. There would be a problem if there is not an affirmative level for all form of remuneration and some part of remunerations are taxed differently com- pared to others, which means less or more favorable, then the employee’s income has not been taxed either fully or correctly. Harding mentions that, there is a mo- tivation among both employees and employers to change the whole their earning package towards a sort of lower-taxed sort of remuneration, which finally will lead to maximizing after-tax income for employee and at the same time minimizing the cost that employer is responsible to pay. (Harding, 2014)
Additionally, in taxation of company cars, tax authorities need to describe and define what is meant by private use. Because, when the number of travels with car increases, it has shown to be more difficult to find out if the purpose of travel was business or private. (Guti´errez-i-Puigarnau and Van Ommeren, 2011)
Methodology and Data
The aim of this study is to investigate the impact that company cars have on travel behaviour of employees in Sweden. This chapter will explain how the research is conducted in depth. Initially, the choice of a quantitative method will be discussed.
Afterwards, the chapter will justify how the data needed was gathered and finally in which way the data was analyzed. The analytical framework for analyzing the quantitative data is described as well.
4.1 Choosing research methodology
The discussion of relevance or differences between quantitative and qualitative re- search method has always been there in the field of education, especially in case of researches. Therefore, the following part will briefly argue the characteristics of both quantitative and qualitative methods.
Within research field, there are some approaches that can be used for a paper.
It can be either in a way that hypotheses are made based on existing theories, which is called a deductive approach or it can be an inductive approach, where new theories and findings are extracted from empirical. (Blomkvist and Hallin, 2015) Since, this paper will look into both empirical material and literature and switch between ideas and understandings which comes from both parts , therefore it will eventually be an abductive approach which fit in this paper. This will also give more strength to the paper by implying a considerable level of sensitivity to the empirical material. (Blomkvist and Hallin, 2015)
4.1.1 Quantitative versus Qualitative research
Within researches two way of reasoning are common. The first one is a deductive reasoning, which theories are used in order to confirm the hypotheses made. The other way of reasoning is inductive, that means generalizations are achieved or de-
veloped from a specific observation. (Buttram, 1967)
In qualitative methods soft and rich data are involved, where words are used in- stead of numbers and semi-structured empirical data gathering is common in this method. (Blomkvist and Hallin, 2015) The processes that are involved in an induc- tive approach make it easier to analyze the qualitative data, which at end will lead to valid and reliable results. (Thomas, 2006)
According to USC(University of Southern California) in quantitative methods sta- tistical, numerical and mathematical analysis is included, which is done through manipulating of the pre-data existing already, conducting new survey or question- naires by taking advantage of computational capabilities. (USC libraries, 2020)
4.1.2 Mixed Methods - Quantitative and Qualitative
The basic assumption of this mixed method is that the combination or integration of these two approaches will result in a better comprehension of research problem, rather than each of them lonely. Furthermore, in qualitative approaches the data are open-ended with no pre-planned responses, while in quantitative data responses are often close-ended and, such as questionnaires. The method is also discussed extensively between researchers and there are different designs for that, such as Convergent parallel mixed methods, Explanatory sequential mixed methods, Ex- ploratory sequential methods and Transformative mixed methods. (Creswell, 2003) Explanatory sequential mixed methods
In this mixed method, after conducting the quantitative research, the results will be explained with further details by the help of qualitative part of the study. Therefore, the method is considered to be ”Explanatory”. Furthermore, the method is also called sequential, since the first phase (quantitative research) of study, is followed by the second part, which is qualitative research. Therefore, this approach consider both statistical and text analysis. (Creswell, 2003)
4.1.3 Research Design
This study is conducted based on a quantitative method due to the nature of quanti- tative methods and will deductively investigate the impact that company cars have on travel behaviour of the employees. The data will be analyzed before going into process of evaluating them, considering the fact that the way data are chosen, ana- lyzed and interpreted will lead the paper to come to the final results. (USC libraries, 2020) Besides that, the fact that quantitative research method involves the test of objective theories, which is performed through investigation of some variables and the relationship between them is also applied on quantitative part of this paper.
(Creswell, 2003) Therefore, the variables used are chosen after correlation test, be- ing checked for avoiding multicollinearity, detecting missing values and outliers in order to get a proper result and avoid bias (See Appendix).
Furthermore, the paper is also getting advantage of a qualitative part for analyzing and extracting results from qualitative data in the paper. This method will lead the paper to gather rich data through analysis of qualitative data in the paper for achieving reliable results. (USC libraries, 2020) Afterwards, a combination of these two approaches, which means a mix method is applied in order to come to reliable result, through having a better understanding on problem formulation, which is the nature of this method. (Creswell, 2003) Therefore, the mix method that the paper will use be ”Explanatory sequential mixed method”, where the purpose is to explain the result of the quantitative analysis with further details by getting help from the results from the qualitative analysis of the paper. (Creswell, 2003)
4.2 Data Collection
As mentioned earlier, data which are analyzed in this paper are gathered by Trans- port Analysis in Sweden through conducted questionnaires with people based on a designed range of questions between year 2011-2016. There are data from each year with a big range of variables. The data collected from respondents asks their main and partly travels in that day or within recent three last days. Some variables in the data gathered by this authority is directly captured from questions from the questionnaire. But, some of the variables, which are marked as ”Coded” in Trans- port Analysis data are provided by setting several questions together. Some other data which are also marked as ”regeisterdata” are also data that doesn’t exist in the questionnaire and is gathered from already registered data, such as respondent’s age and sex, which are automatically uploaded form prior registered data.
Additionally, there are data also gathered for the qualitative part of the study.
This data are collected from reliable scientific articles, Swedish authorities web- sites related to the problem in this paper and online books to gather the empirical data needed for qualitative part of the paper to enrich the paper with qualitative knowledge and to get a better understanding of the research problem. (Creswell, 2003)
4.3 Data Analysis
In analyzing quantitative data there are factors, which should be considered be- fore entering the data for checking the data. Therefore, the size of sample, type of scale of data and checking the data for errors are considered in this paper through analyzing the variables before choosing them. (Saunders, Lewis, and Thornhill, 2009) The first hypothesis is analyzed by a multiple linear regression. For analyzing
the second hypothesis, a binary logistic regression was utilized. This was due to the type of dependent variable for this hypothesis, since this variable is categorical data and therefore a binary logistic regression is proper in such case. (Dong and Peng, 2013). Besides that, the dependent variable ”Ingenf¨orm˚ansbil” is re-coded to a dummy variable, which only take the value of 0 or 1. (Hoaglin and Iglewicz, 1987) Variables and their abbreviations are showed in tables below.
Table 4.1: Hypothesis 1 - Variables’ abbreviation
Variable Abbreviation
Distance of main travels travelled in kilometer within last three days H KM
Access to company car Ingenf¨orm˚ansbil
Main mode of travel H FORD
Main purpose of travel, work or private H AREALL
Distance of travels to work ARB KM
Table 4.2: Hypothesis 2 - Variables’ abbreviation variable Abbreviation Access to company car Ingenf¨orm˚ansbil
Age of the respondent UP: ˚Alder Gender of respondent UP: K¨on
Household’s income HH: Hussh˚allsinkomst
After collecting the data needed for the qualitative part of the paper, they were categorized according to their thematic aspects by the help of PESTEL frame- work, because PESTEL is a applicable framework when the data are being cate- gorized in different themes. Besides that, a thematic analysis will be more flexible method, which is neither tied up in any perspective e.g. theoretical or epistemology.
(Maguire and Delahunt, 2017) In other words, this framework will help to analyze the external environment of a business and give a better comprehension regarding the ”big picture” of that business to the organization, which is active within that business. (Tomayess Issa, Chang, and Theodora Issa, 2010)
Data gathered by Transport Analysis cover data related to daily and main trips done by the respondents in the sample with a broad and big amount of variables.
Therefore, the data used in this paper was filtered before analyzing and getting outcomes. Firstly, the main focus in this paper will be on the respondents main travels for analyzing them during last 3 days as the data are collected through the questionnaire. Variables that was not related to this study was taken away, such as their access to internet and other variables that were not related to topic of this pa- per. The focus was on the variables associated with the problem formulation, while filtering the data and applying the principle of exploratory data analysis (EDA) for initial filtering of data. The definition of EDA by John W. Tukey, 1977 is quoted in a book written by Wendy L. Martinez et al. as ”detective work-numerical detective work - or counting detective work or graphical detective work”. (Martinez et al., 2010) EDA is a approach that highlights the significance of using graphs in explor- ing and understanding the data. The term ”graph” has a specific meaning within the field of data analysis, that refers to visual display of any relationship between number. In this paper the program SPSS (Statistical Package for Social Sciences) is use for this purpose to analyse data. (Saunders, Lewis, and Thornhill, 2009) As mentioned above, variables that are related to problem are analyzed, while vari- ables that had low response rate were also ignored, for having a realistic reflection of effect that these variables have on travel behaviour of people with company. This can be justified by the fact to avoid bias and inaccuracy that may effect the re- sults. (Ioannidis, 2005). In order to prevent the missing values from affecting the analysis of hypothesis 2 and avoid bias, the missing values were also detected and handled by expectation maximum algorithm. (Dong and Peng, 2013)This was due to the fact that the data was missing at random. (De Leeuw, Hox, and Huisman, 2003) This can be due to, when the respondent is filling the household income, may doesn’t know the other person’s income and therefore, has not filled in the house- hold income. However, in hypothesis 2 it was only one of independent variables,
”Household income” that had missing data, were some people had not answered to questions regarding their incomes. After all mentioned preparations the data was used in binary logarithmic regression. Afterwards, the data was divided into two parts in order to be able to compare those two categories with regards to the research question of study. These two groups are now those with company cars and
