Wednesday, January 11, 2012

Does Car Travel equal business?

As gross domestic product (GDP) tends to increase with car travel, some critics argue that a reduction of car travel will harm the economy. However, the correlation between GDP and car travel does not prove that economic growth is caused by car travel. Most developed countries are increasing their GDP per unit of energy and mobility, showing that these economies are becoming more efficient. The paper 'Are VMT Reduction Targets Justified?' (VTPI, 2011) contains many interesting graphs (mostly about the USA) indicating that economic productivity in urban regions tends to increase with declining car travel, declining roadway supply, increasing public transport use and even increasing fuel prices. Conventional transport economic evaluation tends to focus on a limited set of impacts (travel time, congestion delay, vehicle operation costs, accident costs). Other economic impacts are often overlooked, like parking costs, vehicle ownership costs, car infrastructure construction and maintenance costs. This leads to a distortion of project appraisal in favour of car transport improvements. There is an optimal level of automobile travel, beyond which marginal costs of car traffic exceed marginal benefits. Extensive guidance on transport cost-benefit analysis can be found on VTPI's website.

1 comment:

miguel said...

"some critics argue that a reduction of car travel will harm the economy" that's plain bullshit!
I always wonder if people that make that claim - and I have heard people from the carfree movement respecting that argument - have any clue about economics.

Car travel is a cost, not a consumption good. (Oh well, in 0,1% of the cases is actually a good, when you go for a ride, just for the sake of it). It's a cost of going to the supermarket, going to work, etc. Claiming that reducing car travel harms the economy is as nonsensical as claiming that switching from typewriters to word processing software harms it as well. It's simply a reduction in an intermediate cost.