Race to the Finnish

Drivers everywhere are getting off the road. So what is with Finland?

October 5, 2012
Obsession
Energy Shocks
October 5, 2012

For generations of youths, driving a car is a rite of passage. But a growing body of evidence shows that the car is going the way of the Walkman. Young people, for example, are waiting longer to obtain a driver’s license, report Michael Sivak and Brandon Schoettle at the University of Michigan. In the US, the number of people aged 17 to 19 with driver’s licenses shrunk to just 6 in 10 by 2010, down from 8 in 10 in 1983. So it also is in Canada, Germany, Great Britain, Japan, Norway, South Korea, and Sweden, the Michigan researchers say.

Since this apparent great shift began to be noticed, other researchers have tried to figure out what it means. For starters, is it really happening? If so, is it permanent, or a function of the laggard global economy? The folks with skin in the game—the global automobile industry mainly—have the most at stake in penetrating the puzzle.

Toward this aim, the Economist, citing a study by the Australian government, reports that we may be observing a wider trend: simply, given their many years of car-buying, people in wealthy states may have too many, producing a saturated market. The phenomenon is known as “peak-car,” a term introduced last summer by writers at Scientific American. The study looks at 25 nations. The top-line finding is a perceptible decline in driving. Here is a chart from the study, with all but three of the nations (the Czech Republic, Hungary and Turkey) showing a drop in driving per person.

Tap image to zoom
All dressed up.Australian Department of Infrastructure and Transport

That’s an interesting notion, and a wicked turn of phrase. But it’s also not necessarily valid, not if you go by the Michigan study. Sivak and Schoettle found the opposite trend in seven other prosperous countries that they studied (Finland, Israel, Latvia, the Netherlands, Poland, Spain and Switzerland). In these, there was a rise in the number of young drivers (in fact, drivers of all ages). Consider this chart of the drivers of Finland.

Only, that’s not the whole story, either. If you now go back to the Australian study, and look at the Finland chart, you find that, apart from a dip in the years following the 1987 stock market crash, the Finns have been on a pretty steady motoring incline since the early 1960s. Perhaps, perhaps, there is a current flattening out. But we have to wait a bit to see if that carries through. Generally speaking, these seven nations are outliers, with no apparent reason why that should be the case.

Let’s take stock: Younger people in a lot of developed countries are waiting longer to get their driver’s licenses, and people of all ages there appear generally to be driving less. But it’s an evolving story—how does one explain the Finns and the rest of the anomalous group, for instance?

I emailed Sivak asking how to understand the rise in driver’s licenses in the seven countries, when the others showed declines. “Our main finding was that the countries that tended to have higher proportion of Internet users tended to have lower licensure rate of young persons (after controlling for a range of other variables, such as income, unemployment, etc.),” Sivak replied.

So there should be lower Internet usage in the seven countries?

“We used a statistical method called regression analysis,” Slivak replies. “Regression looks at the effects of a given variable, while controlling for the effects of all other variables. Therefore, it does not necessarily follow that the countries that did not have a large reduction in the licensure had a lower rate of Internet use. That is the case ONLY after you control for the effects of the other variables.”

Oh.

It does make sense that, given Steve Jobs’ marketing revolution, the car’s value as entertainment and personal identification has diminished. Yet why are the Finns still driving so much? Sadly, we and the world’s carmakers, like generations of grown-ups before us, may never understand their youth.

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