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18th of July 2018

Automotive



Traffic Doesn’t Hurt the Economy—But We Should Still Fix It

Behold the traffic-dammed and damned city: The very existence of gridlock would indicate that business is booming. But in the field of transportation planning, it’s well accepted that regions with persistent car congestion will lose economic steam. After all, congestion does things like slow down freight as well as stall commuters on their way to the places where they make or spend money.

The notion that congestion costs drivers money buttresses proposals to do everything from widening freeways to synchronizing traffic lights. But you’d expect these costs to manifest in region-wide, economy-leaking wounds. A new study, published last month in the aptly named journal Transportation, challenges this assumption.

By comparing historic traffic data against several economic markers, the authors found virtually no indication that gridlock stalled commerce. In fact, it looked like the economy had its own HOV lane. Region by region, GDP and jobs grew, even as traffic increased. This does not mean speed bumps should come standard on every new highway. Traffic still sucks, and things that suck should be fixed. What this study does is acknowledge that economically vibrant cities will always have congestion. So transportation planners should instead focus on ways to alleviate the misery rather than eliminate the existence of congestion.

Unfortunately, misery alone is difficult to quantify. Which is probably how some economist hit upon the idea of applying a cost-benefit analysis to sitting in traffic. The idea is fairly simple: Each driver’s time is worth some amount of money; that time is wasted if it is spent idling in a sea of taillights. One of the most public-facing cost-benefit estimates of car congestion comes from the transportation analytics firm Inrix. In 2017, the company estimated that the average US driver loses $1,642 a year sitting in traffic. The estimate varies by region. New Yorkers lose nearly $3,000 a year—can you imagine how many cartons of bootleg cigarettes you could buy with that? So you would expect to see that wasted time and money manifested as a slowdown in the economy.

The logic seems valid: Somebody forced to regularly wait in traffic might ask for a raise or take their talents to some other less-gridlocked city. The added cost of retaining and recruiting personnel might sway big companies to move operations. Car congestion also directly impacts commerce—for example, by delaying shipments. But here’s the important thing to consider: Are freight delays driving up the cost of living to untenable levels? Do demands from labor in congested cities actually force companies to take their business elsewhere? Does a region’s economy feel anything from all these ways congestion is supposed to cost drivers time and money?

That’s the thought that occurred to University of Colorado civil engineer Wes Marshall as he was reading one of those annual lists of the 10 most congested metropolitan areas in the US. Every year, the list contains the same shuffle of cities: Los Angeles, New York, Boston, Dallas, San Francisco, Atlanta—a who’s who of honking megalopoli. And wouldn’t you know, those same cities consistently rank highest for regional GDP.

So, he and coauthor Eric Dumbaugh began work on the study that they just published in Transportation. They started with data from the Texas Transportation Institute’s Urban Mobility Report, which has been tracking car congestion in 89 US cities for 30 years. They compared that with 11 years of overlapping numbers of both per capita GDP and job growth for each metropolitan area. They also had a fully overlapping data set of 30 years of per capita income.

Marshall acknowledges that no statistic can paint a perfect picture of reality, but he says he and his coauthor wrangled their analysis into coherence. Once they accounted for all the hanging chads, the overall trend was pretty clear: Traffic really didn’t do much to the economy. In fact, they found that if anything, places with higher car congestion seemed to have stronger economies. Specifically, per capita GDP and job growth both tracked upward as traffic wait times got worse.

Marshall and his colleague aren’t the first to look into the citywide economic impacts of bad traffic. In 2013, Ryerson University transportation professor Matthias Sweet found that very high levels of vehicle car congestion did negatively impact the economy. In Urban Studies, Sweet used the same Texas Transportation Institute car-congestion data but weighed it against only job growth and productivity growth per worker, over more constrained time periods. He found that car congestion did appear to drag on a region’s job growth once it gets to around 35 to 37 hours a year per commuter. (That’s roughly 4.5 minutes of delay a day, ya babies.)

But Sweet doesn’t take any issue with Marshall’s findings. In fact, he says they complement his own: “This adds to what I would characterize as a growing body of work that questions the role of car congestion alleviation as an economic policy act.” He calls out another finding from his 2013 study, which is that before reaching the 4.5-minute per day per commuter threshold, car congestion seemed to indicate stronger economic activity. Even in places with absurd traffic delays—think Boston during the Big Dig—car congestion never kills a metro’s economy outright. “Regions appear to be fairly adaptive, and can grow even when car congestion levels are really high,” Sweet adds.

Which is not to say that everyone should buckle in and accept their daily crawl through purgatory. What Marshall is suggesting is that maybe time isn’t money—not when it comes to commuting, at least. Besides, if congestion seems to accompany a booming economy, he says planners should focus less on the costs and benefits of alleviating it. Instead, they could put their energies into improving the quality of the commute—for instance, by providing people options besides inevitably flooded freeway lanes.

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