Getting the Dependent Variable Right: Trips versus Distance Traveled

There is no question that in the United States driving is declining, and that Vehicle Miles Traveled (VMT) have also declined in absolute and in per capita terms. There are questions as to why, however.  It’s important to understand why and how travel is declining, and we have decades of research that suggests that people consume travel in economically predictable ways by consuming more or less based on income. USPIRG and others are reluctant to view economic reasons as the main cause of the observed decline in distance traveled.  I don’t think distance is a particularly good dependent variable on which to analyze economic factors, though, as annualized distance traveled doesn’t really tell us anything about the economic value of travel. A better metric for understanding the economic factors associated with declining travel is trips, especially trips by purpose. What the data show is not just that people are driving fewer miles, they are also taking fewer trips. 

Personal travel has some economic characteristics that are especially relevant here. Personal travel is a normal good in that as income goes up people will consume more of it. This also means that as income declines people will consume less of it. Conversely, transit, certainly as practiced in the US, has many characteristics of an inferior good where demand declines as income goes up (remember I’m talking about inferior goods as an economic concept. This has nothing to do with the actual quality of transit service.). This is because people replace transit trips with auto trips (or walking trips in certain areas such as parts of Manhattan) as they can afford it.  Now, perhaps since there are lots of new rail systems that were designed specifically to attract people who would otherwise drive we shouldn’t view transit as an inferior good in all situations. I suspect this is true in some cases, but not in most.

The other economic characteristic of personal travel is that it is a derived demand, and distance traveled is a function of the trip demanded. This means that, by and large, people travel because of what they want to do at their destination: work, shop, eat, school, etc. Some of these destinations are close and some are far, but rarely do people decide how far to travel before they decide where to go. As economic conditions for individuals and households change, especially decline, they are likely to make fewer trips out of the home, which will lead to less distance traveled. This is especially true if the areas declining economically are sprawled metros. If trips are declining is sprawling areas then this will lead to unusually large distance traveled declines in surprising areas. 

An an example of the economic value of travel, if a person drives to get a hamburger the value of the trip (utility) is derived from eating the hamburger, not the distance the restaurant is from their house. If someone drives two miles for a hamburger the utility of the trip is nearly identical to driving one mile for the same hamburger, as the marginal cost of the additional mile is small. It certainly isn't the case that the two mile trip has twice the economic value as the one mile trip. 

A more accurate way of looking at the economic influences of personal travel is to look at trips, in part because personal travel is mostly non-work and non-commuting. Looking at data presented in Commuting in America III highlights some of the issues with trips. (The .pdf is secured so copying the tables is more time  consuming than I will take time to do here, but you can read the tables in the report.) Table 1-1 shows the relations between person trips and person miles of travel. Only 18% of distance traveled is due to commuting. Figure 1-2 shows the trips per capita by type for the past few decades (all data from NHTS/NPTS). The number of work trips is fairly stable at just over .5 per capita per day. Personal business and social trips are where the increase in travel happened, where these now consume over three trips person per day, which is about doubles from the late 1970s. The CiAIII report also shows that work trips have declined as a share of overall travel (by trip and total distance) substantially.  According to the 2009 NHTS average annual miles traveled getting to and from work have declined since their 1995 survey (Table 5 below and available at the link above.) The number of commute trips has declined in the same period, too, from 676 per person per year to 541. Moreover, the average distance traveled per trip (for all trips) increased slightly from 11.7 miles to 11.9 between 2001 and 2009.

Table 8 in the 2009 NHTS report shows person trips by household income, and it shows that as income increases the number of trips taken increases (trips as a normal good). Table 11 shows miles per trip type, and it shows that the total number of commute trips per person has declined along with miles traveled. In addition, all trip types have declined in number per day. Looking at Table 6, the average vehicle trip length is largely the same between 2001 and 2009. (Check the link for the tables as I don't want to make this post longer than it already is.) Taken all together, it seems likely that the decline in distance traveled is due to a decline in the number of trips taken. I argue that this is an important distinction when we think about policy.

If we think that people are doing all the travel that they used to but are now traveling shorter distances, then the natural policy response is to physically rearrange our cities. I suspect this is a reason that the VMT declines are so compelling to urbanists who prefer compact development, as their desired urban form happens to be useful policy in this case. Yet the decline is distance traveled is less associated with compact physical structure of cities and more associated with fewer trips taken. One way we know this is that metro areas were continuing to sprawl as distance declined.  If anything, the decline is distance traveled is associated with the suburbanization of employment, shopping, entertainment and recreation. There is evidence that this is the case. Ultimately, while some downtowns and town centers are doing very well at attracting new residents, the total number of people moving to these locations is fairly small (maybe a couple of hundred thousand across the country so far, and that’s a generous estimate) and not enough to offset the decline in distance driven. Nor are people substituting transit for driving in any great number. In some cases, it is absolutely happening, but most of the driving that is no longer happening cannot be reasonably substituted to transit.

If, instead, we consider that people are not traveling as far because they are not traveling as often, then we may be looking at behavioral responses to declining utility of travel. Why are people not taking trips they used to?

Here are some reasons, all of which have economic justifications related to the economic characteristics of personal travel mentioned above. These are also global conditions, which fit with observed declined in travel in developed countries around the world.

•       Household structure has changed. People are putting off having kids, and kids are associated with a lot of travel.
•        Families with children have fewer children. This is especially true for wealthier households.
•        Young people are broke and unemployed with lousy job prospects.
•        Cars are increasing in costs faster than inflation.
•        Consumption trips are substituted for delivery.
•        The relationship between workers and office/factory is changing.
•        There is an upper limit constraint on how much travel people will consume in any day.

There are good reasons to believe that automobility hasreached “peak utility,” but this doesn’t necessarily mean that other modes will be the beneficiaries. It may just mean that people don’t travel as often.

Environmental Explanations for Urban Migration and Sprawl

The NY Times has a story about Chinese households moving away from the largest cities to smaller cities in part because of lousy air and water quality. This is no doubt happening, though data is scarce to  assess to what degree. This does highlight an explanation for urban spatial structure and sprawl in the United States that tends to be forgotten or ignored, which is the role of the environment. As an example of the state of the literature on sprawl, here is a link to a short piece by USC's Richard Green in which he identifies nine key causes of sprawl. I agree with all of these, but I also suspect that desire for clean air and water played a large role. The photo above is of Manhattan in 1966. If the air was still like that I doubt we'd have any $100 million penthouses as you wouldn't be able to see anything. Central cities used to be the center of industry, and that led to lousy local environments. Leafy suburbs were a solution to the dirty air and polluted waterways. Now that polluting industry has left central cities they are more desirable.

Cities in the 1940-1960s (and earlier, but I am thinking primarily of post-war sprawl here) were poisonous places. Toxic air was extremely common and manufacturing industries made things worse. For many reasons it was better and easier to move the people away from the pollution than move the pollution away from the people. It is reasonable to expect that one of the reasons that people did favor sprawling residential land development is precisely because of the known negative externalities associated with living near industry.

Another consequence of lousy air and water is that cities responded by strengthening their zoning codes and land use regulations separating uses. Consider that much (most? I'm not sure.) of the new residential development happening in central cities is happening on land that was rezoned away from industrial uses to residential uses. As an example, the eastern part of downtown Minneapolis was recently rezoned from industrial uses to residential (Update: to clarify, mixed uses are allowed, including residential.).  Links here. Downtown business interests desired that land remained zoned industrial for decades so that development would concentrate in a few skyscrapers, which is why the area is dotted with parking lots. Now that the zoning has changed development is occurring, in part because living downtown is no longer associated with polluted air and water. (As an aside, such development would likely have occurred after the rezoning regardless of a new football stadium, but I'm sure the stadium will get all the credit. The Metrodome didn't "create" any development because the zoning wouldn't allow it.)

So local zoning for industry was a reasonable reaction to major environmental problems of the time, but the regulations are outdated for today's economy. This will take time to fix. Perhaps all zoning should have a sunset clause where it expires after 30 years so the codes become more adaptable to economic conditions.

The main reason we have clean air and water is because of federal regulations installed under the Nixon administration, and a main reason we still sprawl is because of local regulatory responses to environmental externalities. But overall US cities, and cities around the world, were able to improve their environments so that people enjoyed them. From the standpoint of household preferences, it may be that clean air is preferred over any particular type of home. If true, this means that the observed preference for single family suburban homes may be misdiagnosed as the true household preference is (was) for clean air and water. Now that clean air and water are universal in the US, household preferences prioritize other aspects, such as housing type, amenity value, or other factors. There is little research on the role of environmental qualities for household preferences for suburban or urban living. I don't think the data exists to historically test this proposition for the US, but we can measure these effects in contemporary Chinese cities if we can collect the right data.

If it turns out that environmental factors are a non-trivial cause of sprawl, then federal environmental regulations may be effective pro-urban policies that complement other urban policies. In turn, the local responses of stricter zoning because of environmental pollution were ineffective and ultimately damaging to metropolitan spatial structure and sprawl, which work against other public interventions. Clean air and water are public goods that require global (or national) responses.

Should Voters Have Full Information When Voting on Transport Projects?

Voters are asked to vote on all kinds of transportation projects. In part this is because of declining federal support for projects, and local tax increases require voter approval. Elected officials are also hesitant to promote new taxes to fund projects without clear direction from the electorate. Usually new taxes for transport spending are passed. Yet there are many referendums on specific projects where taxes are proposed for particular investment. Without making any claims about the value of any of the individual projects, it is worth considering when projects violate the spirit and letter of the votes taken. I highlighted some examples pertaining to value capture previously, including the downtown Los Angeles streetcar, which may double in cost and provide less service than promised to voters. Califonia's high speed rail has also been criticized for not adhering to the specific systems and costs spelled out in the statewide 20008 referendum to raise a share of the cost of the project. See Lisa Schweitzer's piece in the LA Times for some details.

This isn't just a problem for transit projects, either, though maybe it is a problem that is worse in California because of a variety of populist legislative requirements. Here is another Golden State example. Today's LA Times reports that the 405 toll road project is in trouble politically. There are a few causes described:

At a meeting this month, crowds packed an Orange County Transportation Authority board meeting to denounce the lanes, which have been supported by Caltrans. City leaders expressed worry that the project would push traffic onto their streets, or that motorists traveling in the toll lanes would find it too difficult to pull off the highway and patronize local businesses.
The political shift over toll lanes has several causes. Some of Orange County's toll roads have struggled to attract drivers and each of the major corridors has been forced to refinance its debt to avoid possible default.
There has also been the sticker shock: Riding the 91 Express Lanes can cost nearly $10 each way at the most congested hours, an investment even for Lexus drivers. If the 405 toll lanes are built, the priciest one-way toll would cost $9.91.
As for the 405, much of the anger stems from what Orange County Supervisor John Moorlach called a "bit of a bait and switch." When voters approved a countywide half-cent sales tax, they were told funds would go toward adding one general purpose lane in each direction at a cost of $1.25 billion.
Instead, the proposal before the OCTA would add one free lane and one toll lane in each direction — but it would also convert an existing carpool lane in each direction into a second toll lane, with the added $220-million price tag paid through bond sales that in turn would be paid off by tolls.

So the project as implemented is not what the voters approved. It is substantially different, in fact. I have written about credible commitment as a barrier to road pricing before, but what is happening with these experiments in direct democracy are a bit different. Rather than voters opposing new taxes or fees because they don't believe the revenues will be used as promised the votes for specific projects are not held as binding. 

There are many problems associated with these types of direct democracy for allocating scarce resources. When voters vote on a project, be it rail, transit, roads, etc., they should have complete information. Since transportation infrastructure projects tend to go over budget frequently, which affects the scope of the projects, it is difficult for voters to accurately assess their support or opposition. Also problematic is the absence of recourse the voters have. By pushing tax and spending decisions to the ballot box elected officials insulate themselves from the severe problems that tend to arise. After all, it was the voters who approved the project, not Rep. So and So. 

Issues of representation, credibility and voter information have not been well examined in the context of local transport finance. As the federal role in transport finance is declining in the US, we need to figure out better ways of raising money for and spending on the infrastructure that we want and need. The experience in California is not encouraging for experiments in direct democracy for transport investment.

Welcome to the Future

This past week New York City auctioned 200 new taxi medallions for record prices. The high bid was about $2.5 million for a “minifleet” package, and the accessible medallions fetched record prices as well. These prices and the people who paid them send strong signals about what will happen with the taxi industry in New York. The rent seeking behaviors will continue, the regulators are captured by the industry they are supposed to regulate and taxi policy in the city is expected to remain at the status quo of constrained supply and unmet demand. I suspect that the boro taxi program will barely survive but not be expanded, and Uber and other ridesharing services are screwed. In short, what we have now for taxi services is pretty much all we get. I worry that most or all of our transport systems have similar constraints. Welcome to the future. 

So are we conscripted to a future just like the present? Can we solve pressing concerns?

Recently David Levinson write a nice post about what traffic might be like in 2030. It is a nice future scenario that is dramatically improved on current inefficient systems. I agree with much of it but am concerned that regulatory and labor constraints have cemented too many of our systems in place and the future will end up looking a lot like what we have now. Here are some areas of particular concern and in no particular order:

• ·      Concession agreements are in place that are far longer than existing technologies will last. For instance, the Chicago parking meter concession requires that the city compensate the LLC for any loss of value to street parking during the course of the 75-year agreement. This means that even if cars and driving decline, Chicago may have to pay a penalty.  This affects Chicago’s incentives for reform.
• ·      Labor contracts require too many people working jobs that should be automated, such as train drivers.  This limits new options and services. There will also be a persistent bias toward historical rush hour service even though rides demanded will spread out across nights and weekends. We will also likely replace all passenger cars with driverless cars before we get any driverless transit vehicles. 
• ·      Taxi services are not regulated for the benefit of passengers, nor are the taxi industries all that interested in expanding services.  They prefer to protect their rent seeking. Taxi interests will block new entrants and ridesharing. This is especially problematic because of the nights and weekends issues raised above.
• ·     Cities are branding themselves and this will reduce their economic competitiveness in the long run. Brooklyn, Portland, Austin and others all cultivate their identities at great expense and effort. This suggests that they will fiercely protect what they see as core features, including the built environment and transport technologies. Building restrictions and business preservation will become more restrictive over time, reducing the dynamics of city change.
• ·      Municipal budgets are strained from obligations that do little to improve the lives of current and future residents. Pension obligations are of particular concern as it is extremely difficult to raise taxes to pay for salaries to retired people. These obligations do not have an easy policy answer but will limit future investment resources and flexibility to address currently unknown concerns.
• ·      Much of the infrastructure expansion that has occurred over the past few decades (roads, transit, stadia, etc.) makes municipal budgets worse off in the long run. How cities and states decide to dismantle infrastructure is a crucial issue over the next few decades. As the public rarely has the option of exit deliberate decline will be slower than needed.
• ·      Public investment in infrastructure is not currently aimed at or promoting the greater good. Business elites, downtown interests and others are capturing public spending on transit to serve private interests at the expense of riders. See the streetcar trend as an example. Cities, regions and the nation are not bound together by clear goals, so policy is directed to do something, anything, without a good sense as to what is supposed to be achieved. Again to the streetcars, if they are good for economic development then the budget spent on them should be judged against all other economic development uses of that money. Yet we never discuss opportunity costs like this. Infrastructure investment is pursued as an end unto itself. We tend to focus too much on physical changes (which are small in aggregate) at the expense of service changes that may have larger effects on travel and economic activity.

We are also in a prolonged period of sclerotic governance. While all levels of government have strong roles for ensuring access to opportunities, public safety and economic health, the process of governance is currently not up to the tasks. I see stronger forces protecting the status quo than pushing for reform (see the taxi industry as an example).

So traffic may decline but we may not be able to adjust our systems adequately to address the changes that occur. If our systems of governance work to maintain what we have then the future will look very much like the present.  So how might we re-orient our governance systems to meet future needs? I will return to this in a later post.

Cities Have Always Been Popular on TV

It is somewhat popular now for self-described urbanists to use clever references to pop culture to explain how cities became popular again. For instance, Jeff Speck writes in The Walkable City (p. 20):

"Born as the baby boom ended, I grew up watching three television shows almost daily: Gilligan's Island, The Brady Bunch,  and The Partridge Family. While Gilligan's Island may have had little to say about urbanism, the other two were extremely instructive. They idealized the mid-twentieth-century suburban standard of low-slung houses on leafy lots, surrounded by more of the same...[note: Speck does mention that the shows that were urban all dealt with crime. Then he continues.]...Now, contrast my experience growing up in the seventies with that of a child growing up in or around the nineties, watching Seinfeld, Friends, and, eventually Sex and the City..."

Speck is not alone using TV shows as a touchstone of particular eras. Nearly all of the "back to the city" proponents use some variant of these shows, especially Friends for some reason. These pop culture analogies are compelling, and in this case oddly wrong.

I'm not sure why young people moving to cities is now treated as a new thing*, but so some people say. Speck alludes to two different types of TV shows, though. One is focused on families and the other is focused on young, single adults. Now, as it has always been, family shows tend to be single family suburban and young, singles tend to be in dense urban areas. These general observations may be even more accurate now than they were decades ago.

Here is a link to 1980s popular shows, many of which started in the 1970s. Three's Company, for instance, was about young, single people. Set in Santa Monica, the three shared an apartment, walked to the Reagle Beagle and did not own a car (they tried to buy one to share in season 2 in 1977/78). This sounds urban! One Day at Time was a rare family show set in an apartment that was not New York. The Cosby Show was also as urban as you can get. Taxi romanticized New York at a time when it was very hard to do. Even Joanie and Chachi moved from relatively suburban Milwaukee to the big city of Chicago as soon as they could. There just wasn't an obvious shift in locations or depictions of cities that mirrors any actual changes in attitudes toward cities, and this is especially true for young, single adults.

I certainly don't know about all of the TV shows out there in the world, but I don't know of any that featured young, single people rocking the suburbs. It would be a really boring show! So enough with the Friends and Sex in the City analogy. It doesn't logically or factually work. (Now is when I would go yell at the kids to get off my lawn if I had one.)



*More on this some other day, but young people have always moved to more urban areas. There has never been a mass migration of new, single college grads moving to the suburbs to live by themselves.Young families have, of course, but not singles to any large degree. Young, single people have always favored urban living because young people want to be where the action is.

Nostalgia for Elevators

Streetcars are all the rage these days. Here is a recent story from NPR about the nostalgic value of the rail systems. In the story Timothy Borchers, executive director of Atlanta's streetcar project, states:

But supporters are banking streetcars will work. "It's what built cities originally and it's what's building cities again," says Borchers of the streetcar project.

This is not a unique sentiment surrounding streetcars. Obviously cities existed long before streetcars, so these comments just consider the modern, post-industrial city. Streetcars were part of a wealth of technological changes that occurred in part thanks to electrification. Another technological change was the invention of the elevator, and the elevator had a much more dramatic effect on cities and urban form. Streetcars and other surface transportation allowed for development across large areas of land, but no one built particularly tall buildings because people wouldn't walk up more than five or six floors. With the elevator, skyscrapers were built and very high density became possible. Cities can be dense and vibrant without streetcars, but they can't be dense and vibrant without elevators. Let's give credit where credit is due.

Elevators are under appreciated as a mode of transport, which really is how things ought to be. We appreciate elevators for their utility, not nostalgia or amorphous other benefits. The value of elevators, just like the value of any transport system, is derived from whether we can get where we want to go when we want to get there. We've even managed to eliminate the driver and fully automate them! If only everything could work so well.

What is the Optimal Density for Trick-or-Treating?

Another Halloween has passed, and this was the first year my son went out trick-or-treating mostly on his own. He's five, so we could let him go free in our apartment building knowing he was safe, and there were lots of other kids doing the same. This is a benefit of density for getting candy--his haul was fantastic and he never had to cross a street (though we went to a neighboring building, too. This was supervised.). However, in high density trick-or-treating neighborhoods the entire event lasts about ten minutes, which is much too short. It really doesn't take long to go floor by floor scoring a small handful of candy at each door. In the span of a couple of hundred feet he hit nine apartments per floor! The kid has way more candy than we want him to, and he expended almost no effort to get it beyond dressing up. I think he even stopped at home in the middle to get a new candy bucket. He declared the event a success, perhaps even the best day of his life. It is certainly the best return on effort he's ever had, and he will be sorely disappointed if he thinks such returns are easy to replicate. The whole thing made me wonder what is the optimal residential density for trick-or-treating. It is perhaps less than Morningside Heights and greater than rural Idaho. I think kids should expend at least one candy bar worth of energy getting their loot.