Felix Salmon

Does more economic activity mean more driving?

By Felix Salmon
November 30, 2010

Mark Perry is convinced that the recent uptick in vehicle miles is a good sign, economically speaking; Calculated Risk is not as convinced. Both, however, are working on the assumption that vehicle miles are an excellent proxy for economic activity as a whole, and that the more they rise, the better the economy is doing.

Perry’s chart, in particular, would seem to back that up:


The way in which vehicle miles fell steadily over the course of the recession is startling. But look at CR’s chart:


And suddenly recessions don’t seem as big of a deal: vehicle miles simply tend to rise over time, except for during oil spikes.

It’s worth remembering here that the recession started in December 2007, while oil prices were still rising; they didn’t reach their all-time (nominal) high until July 2008. Given that gas prices lag oil prices, a large part of the fall in miles can probably simply be attributed to high gas prices, rather than to the recession — especially since, as Nate Silver notes, “the cost of gas twelve months ago has historically been a much better predictor of driving behavior than the cost of gas today.”

More generally, vehicle miles are a cost of economic activity, and to the extent that they can be minimized through various kinds of efficiency gains, they should be. Things which are good for a vibrant economy — mass transit systems, telecommuting, e-commerce, walkable neighborhoods — tend to mitigate against driving, while — to take the extreme counterexample — I’d guess that people who have been foreclosed upon tend to spend a lot more time in their cars.

My feeling is that what we’re seeing in the latest driving numbers is no more than the fact that gas prices were low a year ago. I do hold out some hope that we’re decreasing our national reliance on autos, if only a little bit; it would be sad if any economic recovery had to be associated with a concomitant rise in driving. As America moves back into the cities from the crumbling suburbs, is that really too much to hope?

(HT: AR)

6 comments so far | RSS Comments RSS

These aren’t per capita numbers. The number of adults in the US generally continues to grow every year.

I suspect that per capita driving is not going up at all and that all we are seeing is a growing population.

Posted by DanHess | Report as abusive

blame it on TSA…

Posted by rjs0 | Report as abusive

The fact that you live in the city and have access to mass transit doesn’t mean that it’s an appropriate choice for everyone. And in many ways its lifestyle leaves much to be desired. I personally get claustrophobic in Manhattan due to the crush of people and the tall buildings; I barely last a day there. It would be sad if increased economic activity forced more people into the barbaric lifestyle of the city.

I do telecommute almost entirely, but because I have to get on an airplane six or eight times a year, my carbon footprint is well above average. There is no winning.

Posted by Curmudgeon | Report as abusive

“It would be sad if increased economic activity forced more people into the barbaric lifestyle of the city.”

Yes, Manhattan is known for its lack of sophistication and culture! ;)

Posted by FrankLG | Report as abusive

FrankLG, merely a play on Felix’s penultimate sentence.

Posted by Curmudgeon | Report as abusive

How are Miles Driven calculated exactly?

Posted by Skarum | Report as abusive

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