Report shows that higher congestion is associated with better economies

By Eric Sunquist

While transportation agencies gamely battle to reduce congestion with diminishing resources, a new report suggests that traffic jams may have a good side. They are linked to strong economies.

Eric Dumbaugh of Florida Atlantic University, writing in The Atlantic Cities, examines the notion that traffic congestion is a drag on the economy. If so, we might expect that places with high congestion have struggling economies.

In fact, the reverse is true. When Dumbaugh compared metropolitan-level traffic delay data with regional economic data, he found a significant relationship between congestion and economic output: For every 10 percent increase in delay, the gross regional product increased 3.4 percent.

It’s not that congestion causes the economy to improve, Dumbaugh writes. He contends that “automobile congestion, vehicle delay, and their proxy – level-of-service – are not measures of system efficiency. Nor are they measures of economic vitality.” However, vibrant cities creat travel demand, resulting in congestion.

One might argue that the vibrant cities would be even more vibrant with freer-flowing traffic. Dumbaugh doesn’t address this issue, but former Milwaukee Mayor John Norquist, writing recently in the same publication, does.

He suggests that congestion relief can be the medicine that kills the patient.

Early in my time as mayor of Milwaukee, my Public Works director and his staff of traffic engineers came to me with a $58 million proposal for adding right turn lanes to “congested” intersections. The plan involved significant property demolition. I asked if they planned on drawing their pensions after retirement. They looked at me strangely, and then answered yes. I replied, “Then why do you want to destroy the tax base that supports your pension?”

Eric Sundquist is Managing Director at SSTI.