The use of materials is studied broadly, because of the environmental problems related to extraction, production, consumption and waste treatment. The use and substitution of materials in products is therefore a relevant issue for environmental policy making. Studies have been done to describe the material flow or to measure the impact of materials or products on the environment. However, these studies do not often consider economic, substitution and dynamic aspects of material flows. Other studies on material flows analyse the relationship between the use of materials and economic growth, but they do not consider substitution between materials. For environmental policy making economic, technological and environmental aspects of the use of materials need to be considered. Especially, substitution of materials is important. In various countries material and product policies are imposed on a variety of materials and products. For evaluation of these policies their environmental and economic effects need to be examined in detail. This study aims to analyse the economic and technological factors influencing the use of materials and the substitution between different materials dynamically. The goal is to obtain an insight in the effect that material levies may have on the use and substitution of materials. The statistical analysis is performed on a specific product-group because decisions on the use of materials are taken on a product-level. The case study is performed on automobiles. The results show that the material use is largely an autonomous development. The price of aluminium has a positive, significant effect on the use of that material. The price of plastics has a positive, but not significant effect on the use of plastics. Reasons may be that the costs of a raw material are small relative to the processing costs, and that the production process can only be changed slowly. Other factors, like competitiveness and consumers' tastes, may be more important for substitution. This implies that levies or subsidies on certain materials is not a promising policy to change the use of materials. Besides time, there are two other factors that have a positive and significant relationship with the use of aluminium and plastics: the fuel efficiency, which is the distance driven divided by the energy used; and, the road tax, which depends on the weight of a car. However, these effects are caused by their positive relationship with time. The main conclusion of the case study is that imposing a levy on materials may not have the desired or expected effect of reduction in material use. Copyright (C) 1998 Elsevier Science B.V.