erlbaum - trb session 6811 energy price and travel behavior
TRANSCRIPT
Erlbaum - TRB Session 681 1
Energy Price and Travel Behavior
Erlbaum - TRB Session 681 2
Topics
Historical energy price and travel behavior Why can’t 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
Erlbaum - TRB Session 681 3
1973-74 Energy Crisis – Impact on Travel NYSDOT PRR 131, December 1977A 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
Erlbaum - TRB Session 681 4
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
Erlbaum - TRB Session 681 5
Individual Travel Behavior Under Energy Constraints (cont’d)
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
Erlbaum - TRB Session 681 6
Individual Travel Behavior Under Energy Constraints (cont’d)
Government Response ’73-74 Odd/Even 5% Monthly Set aside CAFE 27.5 by 1985
Nothing until 2007 Increase CAFE 35 by 2020
Erlbaum - TRB Session 681 7
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)?
Erlbaum - TRB Session 681 8
Erlbaum - TRB Session 681 9
VMT Bridging Trip Purpose with Activity Category
36%
28%
36%
Mandatory/Subsistence
Maintenance
Discretionary
VMT associated with the trip purpose "return to home" allocated to the three activity types shown.
Mandatory/Subsitence = Work, School and Food Maintenance = Scheduled Types of Activies. Discretionary is Discretionary. Maintenace and discretionary activities may be chained with mandatory activities.
Source: 2001 NHTS, VMT by WhyTrp01, http://nhts.ornl.gov, national dataset summarization
Activity Category
2001 NHTS – Trips v. Activity
Erlbaum - TRB Session 681 10
Erlbaum - TRB Session 681 11
Can we actually show the elasticity of travel demand related to gasoline price?
What are basic travel relationships we should understand?
Erlbaum - TRB Session 681 12
1995, 2001 NHTS NYS Add-on Results
Residential Household Travel
95.695.2
Erlbaum - TRB Session 681 13
Travel & The Economy
Assessing Trends Economy
Price or 2nd, 3rd order cascading economic effects? Pending recession? Is behavior influencing economic activity or
economic activity influencing behavior?
Erlbaum - TRB Session 681 14
U.S. VMT v.s. GDP1983 - 2006
R2 = 0.96
0.00
0.50
1.00
1.50
2.00
2.50
0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50
GDP
U.S.
VM
T Economy grows travel lags, distance between points is the
measure of the lag
Source: VMT – USDOT, FHWA – Highway Statistics
GDP – USDOC, BEA
Erlbaum - TRB Session 681 15
George Washinton Bridge Traffic Volume vs GDP
R2 = 0.94
0
50
100
150
200
250
300
350
400
450
500
0 100 200 300 400 500 600 700
Milli
ons
Thousands
Vol
ume
GDP
Economy grows travel lags, distance between points is the measure of the lag
1966-2006
Source: GW Volumes - Port Authority of NY & NJ
GDP – USDOC, BEA
Erlbaum - TRB Session 681 16
Statewide View of Travel
Assessing Trends Monthly data Linear trend line 12 month moving average Polynomial Peak v. valley growth
Erlbaum - TRB Session 681 17
US VMT Trends
0.84
0.94
1.04
1.14
1.24
1.34
1.44
1.54
Upper Bound Polynomial Trend
Lower Bound Polynomial Trend
Actual Polynomial Trend
12 Month Moving Average
US VMT
Linear Trend
Source: Monthly VMT – USDOT, FHWA Traffic Volume Trends
Erlbaum - TRB Session 681 18
US VMT Trends
0.5
0.6
0.7
0.8
0.9
1
1.1
1.2
1.3
1.4
1.5
Jan-
83
Jan-
84
Jan-
85
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86
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04
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06
Jan-
07
US VMT 12 Month Moving Average Linear (US VMT)
RecessionPresidential Election
Source: Monthly VMT – USDOT, FHWA Traffic Volume Trends
Erlbaum - TRB Session 681 19
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?
Erlbaum - TRB Session 681 20
Actual U.S. VMT and Forecast U.S. VMT
190.0
200.0
210.0
220.0
230.0
240.0
250.0
260.0
270.0
280.0
290.0
Jan-
00
Mar
-00
May
-00
Jul-0
0
Sep-
00
Nov-
00
Jan-
01
Mar
-01
May
-01
Jul-0
1
Sep-
01
Nov-
01
Jan-
02
Mar
-02
May
-02
Jul-0
2
Sep-
02
Nov-
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Jan-
03
Mar
-03
May
-03
Jul-0
3
Sep-
03
Nov-
03
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Mar
-04
May
-04
Jul-0
4
Sep-
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Nov-
04
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Mar
-05
May
-05
Jul-0
5
Sep-
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Nov-
05
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Mar
-06
May
-06
Jul-0
6
Sep-
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Nov-
06
Mill
ions
Month
MVM
T
Derived Forecast Actual 12 per. Mov. Avg. (Actual) 12 per. Mov. Avg. (Derived Forecast)
A function of historical % chg in MVMT- forecasts future MVMT (January 2004-date)
Actual
Derived
Source: Monthly VMT – USDOT, FHWA Traffic Volume Trends
Actual
Erlbaum - TRB Session 681 21
Elasticity?Elasticity v. Percent Change in Gas Price
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
-20.0% -10.0% 0.0% 10.0% 20.0%
Change in Gas Price
Ela
stic
ity
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)]
Elasticity v. Time
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
Oct
-04
De
c-0
4
Fe
b-0
5
Ap
r-0
5
Jun
-05
Au
g-0
5
Oct
-05
De
c-0
5
Fe
b-0
6
Ap
r-0
6
Jun
-06
Au
g-0
6
Oct
-06
De
c-0
6
Fe
b-0
7
Ap
r-0
7
Jun
-07
Au
g-0
7
Ela
sti
cit
y
R^2~=0.05
Erlbaum - TRB Session 681 22
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
Erlbaum - TRB Session 681 23
Why is elasticity not evident?
Economic Rule of Thumb People react to price increases only when they can turn
to substitutes Even price doesn’t do a really good job
Price Increases Alternatives? Can’t change the type of fuel you use Can’t stop going to work
Gasoline purchases are closely tied to things we own Home – location choices Car – mobility choices
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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
Erlbaum - TRB Session 681 25
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 don’t change behavior for blips
Erlbaum - TRB Session 681 26
Unintended Consequences
Erlbaum - TRB Session 681 27
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
Erlbaum - TRB Session 681 28
I Want You
To Give Me More Gas Tax Money
Erlbaum - TRB Session 681 29
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
Erlbaum - TRB Session 681 30
Price Trends
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00A
ug-7
9A
ug-8
0A
ug-8
1
Aug
-82
Aug
-83
Aug
-84
Aug
-85
Aug
-86
Aug
-87
Aug
-88
Aug
-89
Aug
-90
Aug
-91
Aug
-92
Aug
-93
Aug
-94
Aug
-95
Aug
-96
Aug
-97
Aug
-98
Aug
-99
Aug
-00
Aug
-01
Aug
-02
Aug
-03
Aug
-04
Aug
-05
Aug
-06
Aug
-07
Fu
el $
/Gal
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
Asp
hal
t $/
To
n
Fuel
Asphalt
Source: NYSDOT, Construction Division
Erlbaum - TRB Session 681 31
1/20
05
2/20
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3/20
05
4/20
05
5/20
05
6/20
05
7/20
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8/20
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9/20
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10/2
005
11/2
005
12/2
005
1/20
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2/20
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3/20
06
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06
5/20
06
6/20
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7/20
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8/20
06
9/20
06
10/2
006
11/2
006
12/2
006
1/20
07
2/20
07
3/20
07
Bid
3 Months
9 Months
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
Millions $$
Bid Cost Components Subject to Energy Price Adjustment
Bid
1 Month
3 Months
6 Months
9 Months
Bid Price has been adjusted for future energy cost at 1, 3, 6 and 9 month intervals.
Source: NYSDOT, Construction Division
Erlbaum - TRB Session 681 32
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?
Erlbaum - TRB Session 681 33
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
Erlbaum - TRB Session 681 34
The End
Nathan Erlbaum
NYS Department of Transportation
518-457-2967