Transport Economist Challenges Claim That ‘VMT Causes Growth’

The claim to a link between economic growth and vehicle mileage —
that, in other words, auto travel is essential to keeping U.S.
productivity high — remains controversial and much-debated in
transportation policy circles.

One notable recent flare-up in that debate took place on National Journal’s blog after road lobbyist Greg Cohen, referring to an October paper [PDF]
released by the Cascade Policy Institute, contended that "it’s not
simply a correlation but VMT actually causes economic growth."

Now economist Todd Litman, founder of the Victoria Transport Policy Institute, has taken direct aim at the mileage-growth arguments made by Cascade’s Randall Pozdena. In a paper [PDF]
prepared for next week’s Transportation Research Board conference in
D.C., Litman charges that Pozdena’s research "misrepesents" the
relationship between prosperity and VMT "in important ways."

Litman
questions Pozdena’s conclusion, based on the below chart, that
"increasing a country’s income by 10 percent appears to increase its
use of energy by the same percentage."

vtpi_2.png(Chart: VTPI/Litman)

Note
that Pozdena equates a per-capita mileage in poorer nations with a
per-capita mileage increase in richer ones, despite data showing that
growth in car travel slows markedly once individuals reach a certain
income level. Moreover, Litman notes, America and Norway end up close
together on Pozdena’s graph even though "Norwegians actually consume
about half as much fuel per capita as U.S. residents."

Looking
exclusively at developed nations — specifically, the United States —
Litman found that per-capita productivity and VMT were negatively
correlated. Check out his graph of the state-by-state trend below:

vtpi_1.png(Chart: VTPI/Litman)

By contrast, Litman found a positive correlation between per-capita
productivity and fuel prices, suggesting that political opposition to
gas-tax increases, motivated by fear of impeding economic growth, may
be misguided.

But it’s his takedown of Pozdena, using a truism that many remember
from elementary statistics class, which packs the most punch.
(Incidentally, the Cascade paper does argue in favor of one progressive
transportation policy: congestion pricing, which it says may have a
positive "economic footprint.")

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