Transport Economist Challenges Claim That ‘VMT Causes Growth’

The claim to a link between economic growth and vehicle mileage — that, in other words, auto travel is essential to keeping U.S. productivity high — remains controversial and much-debated in transportation policy circles.

One notable recent flare-up in that debate took place on National Journal’s blog after road lobbyist Greg Cohen, referring to an October paper [PDF] released by the Cascade Policy Institute, contended that "it’s not simply a correlation but VMT actually causes economic growth."

Now economist Todd Litman, founder of the Victoria Transport Policy Institute, has taken direct aim at the mileage-growth arguments made by Cascade’s Randall Pozdena. In a paper [PDF] prepared for next week’s Transportation Research Board conference in D.C., Litman charges that Pozdena’s research "misrepesents" the relationship between prosperity and VMT "in important ways."

Litman questions Pozdena’s conclusion, based on the below chart, that "increasing a country’s income by 10 percent appears to increase its use of energy by the same percentage."

vtpi_2.png(Chart: VTPI/Litman)

Note that Pozdena equates a per-capita mileage in poorer nations with a per-capita mileage increase in richer ones, despite data showing that growth in car travel slows markedly once individuals reach a certain income level. Moreover, Litman notes, America and Norway end up close together on Pozdena’s graph even though "Norwegians actually consume about half as much fuel per capita as U.S. residents."

Looking exclusively at developed nations — specifically, the United States — Litman found that per-capita productivity and VMT were negatively correlated. Check out his graph of the state-by-state trend below:

vtpi_1.png(Chart: VTPI/Litman)

By contrast, Litman found a positive correlation between per-capita productivity and fuel prices, suggesting that political opposition to gas-tax increases, motivated by fear of impeding economic growth, may be misguided.

But it’s his takedown of Pozdena, using a truism that many remember from elementary statistics class, which packs the most punch. (Incidentally, the Cascade paper does argue in favor of one progressive transportation policy: congestion pricing, which it says may have a positive "economic footprint.")

ALSO ON STREETSBLOG

Nevada Becomes Newest Battleground in Mileage Tax Debate

|
Nevada’s state DOT is in the early stages of a years-long study aimed at mapping a possible transition from the gas tax to a vehicle miles traveled (VMT) fee, a shift urged last year by a congressionally chartered panel on infrastructure financing and encouraged by Rep. Earl Blumenauer (D-OR). In-vehicle GPS units, such as the […]

Revisiting the Peak Car Debate

|
Cross-posted from the Frontier Group. I’ve never liked the term “peak car.” First, it was always unclear exactly what was supposed to be peaking – total vehicle travel, per-capita travel, car ownership, or all of the above? Second, like peak oil before it, “peak car” applies a catchy name to a collection of concepts that […]

FHWA Gleefully Reports That Driving Is Rising Again

|
After flatlining for nearly a decade, the mileage driven by Americans is rising once again. That means more traffic overwhelming city streets, slowing down buses, and spewing pollutants into the air. But to the Federal Highway Administration, it’s a development to report with barely contained glee. This June, Americans drove 8.7 billion more miles than last June, […]