Nonlinear effects of income and inequality on electric motorcycle adoption in urbanizing economies

Abstract

Income growth, income inequality, urbanization, and EMCs are investigated in this study as having nonlinear relationships using panel data of 37 countries over 2010-2024. The results using fixed-effects negative binomial regression indicate an inverted U-shaped relationship between income and EMCs, in which income and EMCs are positively related in less developed economies and negatively related in developed economies as income increases, as people switch to passenger cars in developed economies. The results also indicate a U-shaped relationship between income inequality and EMCs, in which income inequality and EMCs are negatively related in medium inequality countries as there are fewer people in the middle class, and income inequality and EMCs are positively related in high inequality countries as EMCs are affordable in low-income classes in high inequality countries. The results indicate urbanization as an important moderator in both relationships in which urbanization reduces the negative impact of income in developed economies and income inequality in medium inequality countries. The findings indicate that there is a need for policies in EMC markets in accordance with economies and urbanization, in which policies should focus on making EMCs affordable in developing countries and developing infrastructure in developed countries.