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Justin Horner’s Blog

Is Traffic Necessary for Economic Growth? No!

Justin Horner

Posted March 5, 2012

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Last month, the State Smart Transportation Initiative (SSTI) released a report analyzing a long-term trend in American transportation: the steady decrease in the amount Americans are driving.  According to the report, 2011 saw a 1.2% drop in the total number of miles Americans drove, continuing a now decade-long trend of declining driving.  What can we make of this?

Well, one of the more persistent myths in transportation policy is that the amount we drive is a reflection of how well the economy is doing.  The more driving there is, the argument goes, the more goods are being hauled, the more people are going shopping, employees going to work and families going on pricey vacations. The relationship is so stuck in many people's minds that they see reductions in driving, and efforts to reduce traffic, as threats to the national economy.

In past centuries, factories belching pollution were seen similarly: smoke up the stack meant jobs, production and growth. Fortunately, we have since learned that pollution is not necessary for economic growth and that growth with unacceptable environmental consequences is not growth we should choose to pursue.

The same can now be said for driving.  A new legislative fact sheet from us here at NRDC shines light on recent research on the relationship between economic growth and total driving (or VMT, Vehicle Miles Traveled).  The good news is this: Americans can rest assured that efforts to reduce traffic will not hurt the economy, and, perhaps as importantly, we don't have to suffer through more traffic for our economy to grow.

In our piece, we discuss:

  • how VMT and GDP, which for decades rose together, have been diverging significantly over the past ten years.  As GDP has continued to grow, total VMT (not just per capita VMT) is actually declining;  
  • how growth in VMT is not reflected in arguably more important measures of economic benefit, such as average household income; 
  • how those states with the greatest per capita GDP also happen to have the lowest per capita VMT; and
  • how the American economy is getting more and more efficient, in that it now takes a lower VMT "investment" to generate GDP.

While only one study has ever claimed that driving actually causes economic growth, a variety of studies have strongly implied this relationship, and the idea of driving as an indicator of economic well-being is widepsread.  

Yet the absurdity of the argument quickly becomes clear: nobody is suggesting we all hop in our cars and drive around for two hours every night to get the economy moving. Driving is what is called in scientific circles a "derived demand;" that is, people drive not for its own sake but rather to get to something they want.  

As transportation reformers like NRDC have argued for years, we can reduce driving, traffic and pollution just by making sure those things people want and need are more conveniently located.  

This means more investment in public transit, bicycle and pedestrian infrastructure and regional land use planning strategies that create convenient, walkable neighborhoods.  

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