The Importance of Driving to the U.S. Economy Started Waning in the 70s

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Americans drive much less per unit of economic output than we did a generation ago.

Earlier this year, following a slight uptick in U.S. traffic volumes, Transportation Secretary Anthony Foxx said in a press release, “More people driving means our economy is picking up speed.” He’s not the only person to equate traffic with economic growth. Even former New York City Mayor Michael Bloomberg once said, “We like traffic, it means economic activity,” before his administration embraced ideas like congestion pricing, bus lanes, and protected bikeways.

In fact, the amount Americans drive is an increasingly poor reflection of the nation’s economic output. A forthcoming analysis from Michael Sivak at the University of Michigan Transportation Research Institute (sorry, no link available yet) finds that by some measures, driving has been “decoupling” from U.S. economic growth for a generation.

Sivak looked at two measures of driving activity in relation to economic growth: mileage per unit of gross domestic product and fuel consumed per unit of GDP. On both of those metrics, when GDP is adjusted for inflation, the amount of driving relative to economic output peaked in the 1970s.

Distance driven relative to economic output was highest in 1977. After that, it more or less plateaued until the 1990s, when it began to decline sharply, Sivak reports. Today it stands at about where it did in the 1940s.

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Meanwhile, fuel consumption per unit of GDP peaked even earlier, in 1972. Today it is lower than it was in 1946 — the first year of data Sivak considered.

Sivak notes that the decoupling of economic output and fuel consumption almost certainly reflects, at least in part, stronger fuel economy standards. But that doesn’t explain the similar situation with driving levels.

Sivak says part of the explanation seems to be that today’s economy is much more reliant on services and information than it was a generation ago. But other factors, such as growth in transit use and “changes in the age composition of drivers,” probably contribute as well. The changes, he says, “likely reflect fundamental, noneconomic changes in society.”

  • This should come as no surprise given the enormous amount of energy given over to transportation, but peak net energy per capita was also in the mid-1970s.

  • Larry Littlefield

    The trend is explained like this. In the 1950s and 1960s middle class and affluent people moved to the suburbs, but shopping and major employers remained concentrated in the cities. That required a lot of driving.

    Through the 1970s and 1980s shopping and jobs moved to the suburbs. That meant more driving and more trips, but for fewer miles. Most drives to work were 15 minutes or less. “Jobs housing balance” to cut travel was a planning goal back in the day.

    More recently in some metro areas, jobs and people have been moving back to the cities. That reduces driving even more.

  • thielges

    The top chart would be more useful if it were normalized for inflation. Otherwise it could be argued that the drop is due to inflation instead of better productivity.

  • C Monroe

    Lot of that was due to energy efficiency guidelines for home appliances early on and then when companies found out they could pad the bottom line by being more energy efficient of course they jumped on it. There are two modern Ford auto factories in Michigan that produce 70% of its own energy from wind, solar and heat capture from manufacturing. There are pig and cow farms that now produce enough energy to power the small town they are near through methane from manure.

  • I mean peak net extracted energy available to do work per capita. Not energy usage per capita.

    Renewables are still a small percentage of overall energy available. They’re about 12% of electricity generation, but generated electricity is only 40% of overall energy usage.

    Transportation is 30% of US energy usage alone.

  • Michael Sivak says in the paper that the figures are inflation-adjusted.

  • That was my first thought. I get that there’s an agenda here but c’mon that’s bad statistical analysis.

  • J

    These graphs show more the improvements in vehicle fuel economy since the 1970s. The decoupling of vmt and GDP appears to be much more recent, and most graphs I’ve seen put that date at around 2004.

    http://usa.streetsblog.org/2013/08/29/more-evidence-that-unemployment-doesnt-explain-the-decline-in-driving/

    http://www.investing.com/analysis/vehicle-miles-driven:-a-structural-change-in-our-driving-behavior-224256

  • You didn’t actually read the article did you?

  • I’ve seen this info on “de-coupling” of driving and the economy a couple of other places and it didn’t quite sink in, but after reading this I thing I get it. That last paragraph in the post seems to say it all:

    “other factors, such as growth in transit use and “changes in the age composition of drivers,” probably contribute as well. The changes, he says, “likely reflect fundamental, noneconomic changes in society.””

    So if I am indeed finally understanding this issue, it’s about the way that driving levels were perhaps at one time in our past a decent indicator of economic growth because of the way personal-car mobility was ingrained as a necessary part of our economic activities. But various cultural and technological changes in society have made car mobility less important for economic activity. Is that right?

  • J

    Oops, looks like I missed a major point in the article. I deleted the comment.

  • Brian Higgins

    The point I see it is that new roads are continually justified based on the idea of economic development, but that this is a false argument. Driving miles have sunk, but the economy has grown in spite of that fact. (a graph showing the growth of the economy since 1972 would have been helpful to illustrate this.)

  • It’s ok. Actually this didn’t survive editing but my original version said Sivak’s previous four studies found the correlation peaked in 2004. This one was different though.

  • Alon Levy

    No, pkm and vkm per capita both kept rising until the mid-2000s, they just rose more slowly than GDP per capita.

  • Dan

    There is no doubt that development is becoming more compact. However, my compact suburb views mixed use development as a “variance” and still zones everything, for the most part, single use. Commercial, housing, but not both together. Therefore, people still need to drive as the bus service is pathetic and non existent by my house and it’s not bike friendly here. Plenty of sidewalks but distances are too long and four lane arterial roads to cross to boot.

    I think most of the decline in driving has to do with baby boomer’s getting older. I wish I could fool myself into believing everyone rides a bike to work like I do, but in the winter I am the only one here doing it, and there is no snow on the ground here either, zero.

  • The reason it matters so much is this: All these DOT types that have been doing this forever (and decide how many roads we need more or less) have been resistant to accept the idea that a long-term change in driving behavior has occurred. They think, once the economy rebounds some more, driving will go back to normal, and they can resume planning for endless growth in driving miles.

  • EDG

    Looking at the Y, it could simply be increasing fuel efficiency since the oil crisis’ of the early 1970’s.

  • Thanks — that makes sense. Designing places and roads for peak-hour car capacity is harmful enough. Doing that with inflated projections of driving behavior makes things even worse.

  • Kenny Easwaran

    That explains the difference between these two graphs. But the first one is a graph of miles driven per economic activity, which seems if anything to be held back by fuel efficiency. (After all, if you only need 20 gallons rather than 50 gallons to go 1000 miles, then that’s 30 gallons less of gas purchases and refinery outputs associated with the given amount of driving.)

  • Except that nothing changed during the “let’s forget about fuel efficiency and buy SUVs” madness of the 1990s.

  • Bernd

    http://justinratner.com/wp-content/uploads/2011/04/usManufacturingPercGDP1947-2009.png

    GDP from making things began its terminal decline in the late 1960s and 1970s, at least in constant dollar per capita. The GDP from moving around financial instruments began replacing it. Nobody has to drive anything anywhere to move around financial assets. Of course less real wealth is produced which is why americans are becoming increasingly poorer and have their lifestyles supported by debt.

    PS: trucking stuff from the ports to the stores is not nearly enough to offset the movements of an entire supply chain. At best it replaces moving the finished goods.

  • Adam Anon

    Internet > Driving 😉

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