MD GPI 1.0: Calculating the Cost of Commuting
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What is the Cost of Commuting?
Commuting has many financial impacts. Commuting by car, in addition to direct costs such as gas, tolls, and parking fees, also adds to the wear and tear on our car’s engines and tires. We may pay more for car insurance. In some families, even the number of cars they own is determined by their commuting needs. Even those who commute by public transit often have to pay parking fees. Also, traffic directly hurts businesses, as labor service, products and consumers sit idly in traffic. And most important, each of us has better things to do.
Why is the Cost of Commuting Important?
Commuting to and from work consumes an increasing amount of time and resources for the average American. Numerous studies have demonstrated the loss of productivity, loss of free time, and direct monetary costs to individuals.
How Has Commuting Changed Over the Years?
Before the 19th century, most workers lived less than an hour's walk from their work. Today many people travel a long way to work by car, train, bus or bicycle. After World War II, as more people began to own cars, they moved out from the city centers, but continued to work downtown. Congestion on roadways increased and commutes began to take longer.
As urban sprawl has spread out away from central business districts, new businesses began to appear on the outskirts of cities and even in suburbs. Commuting patterns have changed and workers now may travel from suburb to city, suburb to suburb, and even city to city, making traffic congestion a widespread phenomenon. According to the 2000 Census, from 1990 to 2000, about 64 percent of the growth in commuting in U.S. metropolitan areas was from suburb to suburb, while the traditional commute from suburbs to a central city grew by only 14 percent. As more employers move out of cities to be closer to skilled suburban workers, the suburbs now account for the majority of job destinations.
Methodology & Data Sources
There are two types of commuting costs. The first are direct costs, which are incurred for purchasing a vehicle and its maintenance and fares for public transport. The second are the more indirect, elusive costs, which is the lost time that could have been spent on more pleasant activities. Some other studies used operating costs / overall budgets of public transit systems, which create a high likelihood of subtracting government expenditures that were never included in the first place. Using numbers on fares makes more sense, considering that these are actually a part of the original private consumption expenditure figure.
Local fares proved to be virtually impossible to compare over time due to significant gaps in data. The ratio of local to State public transit was calculated for 2007, with local transit about 8% of state transit. From Costanza et al.:We found that it was possible to extrapolate figures for all agencies by applying a trend found in the AAA “1996 Motor Vehicle Facts and Figures”. The report provided a national figure for purchased local transportation for the years 1984-1995. Based on these figures, an increase of 25% was observed during the decade 1984-1994. This ratio was applied, and a similar trend of a 25% rise per decade was assumed with linear interpolation.
The Washington Metro opened in 1976, so fares were taken as zero for before then. Since WMATA data was only available for most recent years, a linear trend from 0 in 1976 to the 2008 value was interpolated. Based on the subsidy formula (which is based on population), 40% of WMATA fares were attributed to Maryland.
Using 250 work days as base (Bagstad and Ceroni), double time for round trip. National mean travel time went from 21.7 minutes to 22.4 minutes between 1980 and 1990, and to 24.4 minutes in 2000. We used those percentage changes, and assumed that trends held constant. Shares of workers commuting by various means were kept constant. The number of workers was also available in the statistical abstract, but due to different values we replaced that data with employed share of Maryland labor force.
Equation
[(Miles Travelled) Multiplied by (Cost per Mile for Vehicle Use)] Added to [(Hours Spent Commuting) Multiplied by (Reduced Wage Rate)] Added to (Spending on Public Transport Fares)
