Matt Yglesias has a bit more on the VMT puzzle and offers the ecommerce hypothesis and caveat.
Virtually 100 percent of the rebound in retail sales has come from online shopping, meaning that a certain amount of pre-recession car trips have been permanently replaced by the Internet. On the other hand, delivery trucks count as vehicle miles traveled so I’m not sure how far this line of thinking gets us.
My thoughts are
1) A miles-per-dollar of retail argument is not hard to make because it seems highly likely that on average a delivery truck is stocked with a higher value of merchandise than a household vehicle out for shopping.
That’s the key stat you need – what the average inventory value of the moving vehicle. It seems pretty clear that a deliver trucks wins on this measure.
Also, note that this is how we would calculate productivity. In the same way that a cashier at a high end store is mechanically more productive than a cashier at a low end store – because they are moving more GDP through their register – the same will be true of delivery trucks versus personal vehicles.
So, this should explain how we are able to get more GDP out of the same miles traveled.
2) The unanswered question though is whether or not total vehicle miles traveled per GDP declines in the steady state. Or, is the increase in delivery truck effeciency offset by a decline in household effeciency.
So, here the argument is that the optimum number of household trips per week doesn’t fall that much but each trip becomes less efficient. This would be the case if things like food, had an extremely strong effect on the number of trips but you are just buying fewer non-food items along with food.
3) There is a general non-durable goods puzzle where not only gasoline but also food per capita seems to be declining and clothing per capita is not growing.
What this is about is not really clear. However, it could simply be a shift as relative prices change. I don’t know.
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Sunday ~ March 4th, 2012 at 9:11 pm
Becky Hargrove
Here’s why you just lost me: GDP increases are not because of overall efficiencies in given systems but interior efficiencies that are captured in a specific organization and then turned into monetary profit. While an organization has to be efficient, GDP rises because total systems are not in fact efficient. Not to say that overall efficiencies aren’t there to be captured at numerous levels outside the organization, but in order for that to happen I’m not sure it can be done in quite the same monetary terms. (People have difficulty in the present acting as individual economic agents) Before we can capture efficiencies outside the level of the specific organization, it helps to know what the overall activities in the system are that can be coordinated, without falling straight into anyone’s ‘master plan’. In other words, how can spontanous community happen with sets of flexible rules?
Monday ~ March 5th, 2012 at 2:45 am
anon
The numbers are also consistent with richer people spending more: less miles travelled, fewer clothes bought. Food is keeping up, because it’s a subsistence item.
Monday ~ March 5th, 2012 at 4:31 am
FT Alphaville » Further reading
[...] – Is e-commerce ending driving? Probably not. [...]
Monday ~ March 5th, 2012 at 7:48 am
Monday 7atSeven: driving downtrend | Abnormal Returns
[...] Why are Americans driving less. (Money Game, Slate, Modeled Behavior) [...]
Monday ~ March 5th, 2012 at 9:01 am
Tyler’s AM Reads – March 5, 2012 « Blog of Rivals
[...] Karl Smith responds to the Yglesias post. Share this:EmailTwitterFacebookLike this:LikeBe the first to like this post. ▶ No Responses /* 0) { jQuery('#comments').show('', change_location()); jQuery('#showcomments a .closed').css('display', 'none'); jQuery('#showcomments a .open').css('display', 'inline'); return true; } else { jQuery('#comments').hide(''); jQuery('#showcomments a .closed').css('display', 'inline'); jQuery('#showcomments a .open').css('display', 'none'); return false; } } jQuery('#showcomments a').click(function(){ if(jQuery('#comments').css('display') == 'none') { self.location.href = '#comments'; check_location(); } else { check_location('hide'); } }); function change_location() { self.location.href = '#comments'; } }); /* ]]> */ [...]
Monday ~ March 5th, 2012 at 11:03 am
RickR
Matt Yglesias’ blog entry lends itself to a(n over-)simplified model, that the entire increase in e-commerce and the entire drop in expected VMT are related by people walking to computers rather that hopping in their cars and driving to the mall. Under this simplified model the entire drop in VMT is due to the increase in e-commerce.
The average yearly increase in VMT from Jan 1991 through Jan 2007 appears to be about 5 billion miles a year, and from Nov 2010 to 2011 is VBMT dropped about 2 billion miles. So we are “missing” about 7 billion miles of VMT.
E-commerce increased by about 7 billion dollars from Jan Nov 2010 to Nov 2011.
So 7 billion dollars/7 billion miles = 1.00 dollars/mile.
Thus, under this (over-)simplified model, people chose not to drive 10 miles to the mall and 10 miles home (20 miles total) to spend a $20, but rather spent that $20 on-line.
I have no data on average length of shopping trips or the average amount spent. But it may be that e-commerce does affect more marginal shopping trips more heavily. Perhaps one is more likely to shop on-line rather than drive to the store if one is going only to buy one or two items.
Monday ~ March 5th, 2012 at 11:35 am
Philip Verleger
The collapse in constuction activty and particularly employment in the sector may offer one explanation for the drop in VMT. I do not follow the VMT data closely but have followed data on gasoline consumption now for 40 years. Consumer expenditures on gasoline have been falling rapidly since 2005 according to the BEA detailed data on consumer expenditures. Changes in disposable income and prices do not fully explain the drop.
However, the drop in employment in construction does seem to explain the discrepancy. Further, the explanation makes sense. Construction workers often drive long distances. Further, they are less likely to carpool because they have to go to different locations. You might see whether the drop in construction explains the residual.
Tuesday ~ March 6th, 2012 at 5:18 pm
C Neal MilNeil (@vigorousnorth)
I wonder to what extent the VMT decline is a level change as retail sales move out of suburban locations (where there was a higher ratio of VMT to sales) and continue to increase in more urban and transit-oriented locations (where there’s a lower VMT/sales ratio).