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Erlbaum - TRB Session 6811 Energy Price and Travel Behavior.

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Presentation on theme: "Erlbaum - TRB Session 6811 Energy Price and Travel Behavior."— Presentation transcript:

1 Erlbaum - TRB Session 6811 Energy Price and Travel Behavior

2 Erlbaum - TRB Session 6812 Topics Historical energy price and travel behavior Why cant we see an elasticity on travel demand related to gasoline price? Are we stuck in an environment of our own creation? Is there some other effect that is not being measured? Or is it the way we measure things? Unintended consequences in the planning process

3 Erlbaum - TRB Session 6813 1973-74 Energy Crisis – Impact on Travel NYSDOT PRR 131, December 1977 A review of a number of studies at that time Travel demand Gas availability more important than price Who is affected by increasing gas price? Not affected: HHs in mid – upper income Severe impact: lower income HHs Who Conserves? HH with travel flexibility High Auto Ownership + Income High level discretionary travel

4 Erlbaum - TRB Session 6814 Individual Travel Behavior Under Energy Constraints NYSDOT PRR 86, July 1975 NYS 3 surveys in 73-74 period 80% at least 1 action Work Related Drive slower Carpool Walk Shop chain Recreation - less or closer

5 Erlbaum - TRB Session 6815 Individual Travel Behavior Under Energy Constraints (contd) Observations Transit increases - not sustained Work trips remain unchanged Non - work trips decline Elasticity Estimates vary widely Sensitive to study, source and control of other effects At best guesses

6 Erlbaum - TRB Session 6816 Individual Travel Behavior Under Energy Constraints (contd) Government Response 73-74 Odd/Even 5% Monthly Set aside CAFE 27.5 by 1985 Nothing until 2007 Increase CAFE 35 by 2020

7 Erlbaum - TRB Session 6817 Is History Repeating Itself? 1973/79 v. 2007 Are travel options physically limited? Settlement patterns Infrastructure Historical modal investment Is travel behavior/activity changing? Is it the economy (pending recession)?

8 Erlbaum - TRB Session 6818

9 9 2001 NHTS – Trips v. Activity

10 Erlbaum - TRB Session 68110

11 Erlbaum - TRB Session 68111 Can we actually show the elasticity of travel demand related to gasoline price? What are basic travel relationships we should understand?

12 Erlbaum - TRB Session 68112 1995, 2001 NHTS NYS Add-on Results Residential Household Travel 95.6 95.2

13 Erlbaum - TRB Session 68113 Travel & The Economy Assessing Trends Economy Price or 2 nd, 3 rd order cascading economic effects? Pending recession? Is behavior influencing economic activity or economic activity influencing behavior?

14 Erlbaum - TRB Session 68114 Source: VMT – USDOT, FHWA – Highway Statistics GDP – USDOC, BEA

15 Erlbaum - TRB Session 68115 1966-2006 Source: GW Volumes - Port Authority of NY & NJ GDP – USDOC, BEA

16 Erlbaum - TRB Session 68116 Statewide View of Travel Assessing Trends Monthly data Linear trend line 12 month moving average Polynomial Peak v. valley growth

17 Erlbaum - TRB Session 68117 Source: Monthly VMT – USDOT, FHWA Traffic Volume Trends

18 Erlbaum - TRB Session 68118 Source: Monthly VMT – USDOT, FHWA Traffic Volume Trends

19 Erlbaum - TRB Session 68119 Elasticity? Trend is Asymptotic after 2004 Synthesize historical MVMT trend for 2004-date Derive elasticity from change in real and synthetic MVMT and actual price Is there a relationship between price change and elasticity?

20 Erlbaum - TRB Session 68120 A function of historical % chg in MVMT- forecasts future MVMT (January 2004-date) Actual Derived Source: Monthly VMT – USDOT, FHWA Traffic Volume Trends Actual

21 Erlbaum - TRB Session 68121 Elasticity? To derive monthly elasticity from previous graphic, use the change in the forecast MVMT and actual MVMT and solve the following equation for the elasticity (E) : [(1+ chg gspr * -E) * (1+ chg MVMT) * MVMT)] R^2~=0.05

22 Erlbaum - TRB Session 68122 Elasticity Not evident Highly volatile Increase and then decline Inadequate periods of significant and sustained price increase Not a player yet Similar observations to 1973/79

23 Erlbaum - TRB Session 68123 Why is elasticity not evident? Economic Rule of Thumb People react to price increases only when they can turn to substitutes Even price doesnt do a really good job Price Increases Alternatives? Cant change the type of fuel you use Cant stop going to work Gasoline purchases are closely tied to things we own Home – location choices Car – mobility choices

24 Erlbaum - TRB Session 68124 Why? Since the 1980s Gasoline has been cheap Cars minivans SUVs More fuel efficient Less fuel efficient Increasing Property Values Move further from place of work Suburbs Ex-urbs 1990 average commute time rose 15% 3 in 4 Americans commute Jobs move out of central cities into suburbs Difficult to carpool Public transit unavailable < 5% of American Public uses Transit

25 Erlbaum - TRB Session 68125 Why? Hefty Price Increase >> 30% for 5+ years Time to come up with substitutes Higher Commuting Costs Smaller car Move closer to work Find a Carpool for the kids Take transit? Consumers dont change behavior for blips

26 Erlbaum - TRB Session 68126 Unintended Consequences

27 Erlbaum - TRB Session 68127 Cascading Impact of Changes in Travel Changes in behavior Less travel Less fuel tax/toll revenue Less infrastructure investment Increasing energy and material prices Projects become more costly Projects delayed or re-scoped Less alternatives due to cost Need for new revenue sources Congestion/time of day pricing Law of unintended consequences

28 Erlbaum - TRB Session 68128 I Want You To Give Me More Gas Tax Money

29 Erlbaum - TRB Session 68129 Energy Impacts on Capital Program Time line Issues Projects: bid in advance Start ~ 3- 6 months later Energy price/material adjustments over project life Preparation of site (Fuel) Material (Asphalt) Delivery (Fuel) Placement (Fuel) Net Result – Project cost escalation Drag on funding

30 Erlbaum - TRB Session 68130 Source: NYSDOT, Construction Division

31 Erlbaum - TRB Session 68131 Source: NYSDOT, Construction Division

32 Erlbaum - TRB Session 68132 Recap History: Changes come out of discretionary travel NHTS 2001 Discretionary and maintenance activities are 60+% of the pie Travel demand 2004 – date Apparent dampening trend Underlying economic uncertainty?

33 Erlbaum - TRB Session 68133 Recap Its not gasoline price No elastic effects identifiable Revenue forecasts Over estimate, if based on simple trends Capital program expenditures Subject to fuel price escalation and volatility Difficult to forecast Hard to budget for Increasing at a rapid rate

34 Erlbaum - TRB Session 68134 The End Nathan Erlbaum NYS Department of Transportation 518-457-2967

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