Traffic and economic growth might be intertwined, but it’s messier than that
Any Bay Area native could tell you about the horror stories of a Costco parking lot on the weekend. When the receptionist at the Fox Rent a Car in Salt Lake City found out my family and I were from the Bay Area, he immediately launched into a lengthy grumble about the terror of finding parking for a simple grocery trip.
He’s not wrong, and as I’ve gotten older, traffic is a problem that just seems to get worse. Traffic has gotten so bad that it is no longer merely an issue of travel time. It turns out that, like most issues regarding transportation, the impact of traffic is much more nuanced and complex.
The Bay Area has one of the strongest economies, but it is also infamous for traffic. Traffic is universally loathed. It’s a nuisance and can even have an adverse effect on public health for a plethora of reasons, as well as on local economies. That being said, there is also some indication that traffic could be one of many factors contributing to a region’s economic growth.
Vehicle miles travelled (VMT) is defined by the Federal Highway Administration as “the number of miles traveled nationally be vehicles for a period of 1 year.” VMT has some shortcomings and doesn’t necessarily measure congestion per se — which is a bit more tricky to capture — but it is still a good indicator of the amount of travel done by private vehicles.
When assessing the trend between GDP and VMT, there is a possible correlation between the two: Since 1936, both GDP and aggregate VMT appear to be growing parallel to one another. This data could be examined through various lenses, in which VMT effects economic growth, economic growth effects VMT, VMT and economic growth affect one another or VMT and economic growth have no relationship. There is plenty of research that relies on these various interpretations, but because transportation is so complex, it becomes hard to make absolute assumptions about the causality between VMT and economic growth.
As just one example of its complexities, a paper from the Cascade Policy Institute breaks down transportation’s relationship to the economy as both a production and a consumer relationship. The production relationship is quite simple — it is the transportation of goods and services. For firms to produce their output, they will need to rely on transportation systems to obtain all necessary inputs.
The consumption relationship, however, is more unclear. The transportation of individuals and households is considered to be consumption when measuring economic activity. But this can become a problem because an individual’s commute to work isn’t counted as production, even though labor is considered to be a production input.
This isn’t to say that reducing traffic by reducing VMT could lead to a slowdown of economic growth. It also doesn’t mean that solutions to traffic that are solely aimed at alleviating congestion will be sufficient, let alone useful. One of the most popular methods of dealing with congestion has been to increase road capacity by creating new roadways, or adding new lanes to current roadways. This has proven time and again to be ineffectual and counterproductive. Increasing road-capacity leads to a short-run and long-run increase in VMT, leading to a phenomenon known as the induced travel effect. The induced travel effect occurs when an increase in roadway capacity doesn’t alleviate congestion, but instead leads to an increase in VMT. And the increase in VMT from the additional lane miles could be responsible for a drastic increase in CO2 emissions.
Transportation is a large and ever-growing contributor to global emissions, hence the need to curb the negative externalities that come from traffic. In the United States, seven Metropolitan Planning Organizations (MPO), including the Sacramento Area Council of Governments and the Metropolitan Transportation Commission in the San Francisco Bay Area, have come up with goals that would end up reducing VMT while still maintaining or increasing economic growth.
These policies are a bit unclear about how they plan to link or even decouple VMT and economic growth in order to meet their goals. However, this doesn’t mean it is an impossible feat to achieve. Lund, Sweden adopted a sustainable transportation plan in 1996 that was successful in reducing vehicle travel while still allowing for economic growth. Since the 1950s, Singapore has successfully worked on the decoupling of traffic growth and economic growth through various policies.
Of course, it is important to be cautious when examining transportation systems and policies across countries as all such systems and policies are implemented under very different contexts. But the success of these programs in other regions underscores the need to better understand and produce inventive solutions for traffic congestion in our biggest cities. There are many proposed and even tested solutions to traffic, such as congestion pricing, that take a unique approach to solving the problem of congestion. Traffic is more than just everyone’s personal annoyance, it is also connected to ideas of not just growth and efficiency, but also the environment and sustainability. To understand traffic means to look at the issue holistically and consider policies that take all these factors into account.
Written by: Simran Kalkat — skkalkat@ucdavis.edu
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