Vehicle Miles Traveled Means Less In Today’s Economy

traffic-economy

Since the Great Depression, the amount of miles driven by Americans was representative of an active economy. According to Michael Sivak of the University of Michigan’s Transportation Research Institute, that may no longer be the case.

For over 75 years Vehicle Miles Traveled (VMT) was pegged to a positive Gross Domestic Product (GDP) in America. GDP is the market value of all recognized final goods (excluding black market goods) produced within a country in a given period of time. GDP per capita is often considered an indicator of a country’s standard of living. Considering that the majority of Americans travel by car to work each and every day and that the bulk of our goods are shipped by truck, a high VMT rate would show an active economy. Thus, the connection between GDP and VMT here in the U.S.

Well, now that theory has been turned on its head. Since 2003 the link between VMT and GDP has begun to slip. The University of Michigan’s Transportation Research Institute compared the GDP of each state to the GDP of Washington D.C. against the VMT of the states from 1997 and from 2011. Over the course of those years the data showed some interesting stands outs like Wyoming.

Wyoming, gained 115% in the GDP department for that state, but only +$2.21/mile for VMT. The reason for Wyoming’s stand out boom in GDP was caused by the natural gas industry and the increased use of fracking to access once inaccessible natural gas. Overall, every state showed an increase in VMT over the years from 1997 to 20011 with the median increase being $1.75/mile for VMT. But GDP was all over the place. If GDP and VMT were truly linked than a high GDP would also indicate a high VMT; but the data does not show that.

According to the University of Michigan’s Transportation Research Institute one of the large reasons for the discrepancy between GDP and VMT is that American’s, in particular young Americans, are not driving as much as they once did. Factor into this theory the increased cost of gas from 1997 to 2011, the demise of the American road trip, the increased use of public transportation, and influx of young people moving to cities during and after the Great Recession, and the theory makes sense. American’s are still working, GDP is on the rise, but we are not driving as much as we used to. So much for that plan to tax vehicle miles traveled.

Source: psmag.com

Andrew Meggison

Andrew Meggison was born in the state of Maine and educated in Massachusetts. Andrew earned a Bachelor's Degree in Government and International Relations from Clark University and a Master's Degree in Political Science from Northeastern University. In his free time Andrew enjoys writing, exploring the great outdoors, a good film, and a creative cocktail. You can follow Andrew on Twitter @AndrewMeggison