Driving up, but hold on to your wallet…

by Adie Tomer | March 15, 2010

About a month ago USA Today ran a great series of stories about the new uptick in national driving, measured by vehicle miles traveled (VMT), and changing traffic patterns.

My initial reaction to this increase was that, although national driving is up, we’re still driving less on a per person basis. In other words, as long as population goes up more people will drive their cars--but this says nothing about our behavior as individuals. It is this behavior that has just as many implications for policymakers and local planners.

One element of the story that I completely whiffed on, though, was what all that extra total driving may mean in the context of our collective pocketbooks.

But then I came across a great story from Daniel Weiss at Think Progress, detailing the changing landscape of gas prices at the pump. Daniel does an excellent job explaining how where those prices are and where they’re going--above $3.00 gallon this summer –and the implications of those price increases on our disposable income, our environment, and national security. It’s a must-read.

While all of these implications are serious, I found the disposable income piece to be the most striking. In the midst of America’s ongoing economic recovery, gas is a vital element to conduct one’s professional and personal business. As Rob Puentes and Emilia Istrate point out, these costs are difficult to avoid in most metropolitan neighborhoods (read: relatively inelastic demand).

It is this mention of neighborhoods that really brings the future driving landscape into view. There is a big difference in gasoline demand between an exurban community reliant on roadways to reach jobs and the grocery, and those walkable and transit-rich developments that get their choice between train, bus, legs, and car. Similarly for summer travel, there will be a big difference for vacationers with travel choices beyond just their own cars and gas-hungry airplanes. We can already see many of the places that will be facing the highest prices.

These ranges of demand--and the resulting impact it will have on metropolitan household income--is another element of this ongoing gas price narrative and economic recovery. There is little question that the 208 million American drivers are going to be a little bit lighter in the wallet, but the answer to the question ‘how much lighter?’ will vary significantly from place to place.

Keeping income in a local economy, rather than send it to oil-based headquarters and foreign governments, is a positive for local economic growth. Look to these oil-based income effects to inform us which places are better suited for a broader economic resurgence.

Source URL: http://www.newrepublic.com//blog/the-avenue/driving-hold-your-wallet%E2%80%A6