Economy, gas prices pushed driving upward in 2015, but less than in past years

By Chris McCahill

The number of vehicle miles traveled (VMT) in the U.S. increased by 4.4 percent in 2015, according to numbers released by FHWA last week, setting a new record of 3.1 trillion miles. VMT per capita, which adjusts for population growth, increased by 3.6 percent, meaning that the average person drove 9,800 miles in 2015—roughly the same as in 2008.

Figure 1. Annual vehicle-miles traveled (VMT), total and per capita, in United States. Data sources: FHWA and Census Bureau

Figure 1. Annual vehicle-miles traveled (VMT), total and per capita, in United States. Data sources: FHWA and Census Bureau

VMT per capita decreased for nine straight years prior to 2014, while total VMT growth slowed for the longest period since Americans first started driving. The main cause of the recent uptick seems to be economic growth, with some added effect from lower gas prices. The U.S. economy, measured as the gross domestic product (GDP), has grown modestly since 2009. Gas prices have fluctuated over the last few decades, dropping by 40 percent since 2013.

Figure 2. Gross domestic product (GDP) and average annual gas price in United States. Data sources: Bureau of Economic Analysis and Environmental Information Administration

Figure 2. Gross domestic product (GDP) and average annual gas price in United States. Data sources: Bureau of Economic Analysis and Environmental Information Administration

After testing several variables and model variations, we developed a model of VMT per capita based on GDP per capita and average annual gas prices. This model tracks actual VMT per capita very closely, including the recent increase, but only after we adjust for new trends observed over the past 20 years.

For decades, VMT growth closely mirrored GDP growth. In the early 1990s, however, the two began to diverge. In 2015, Americans drove 190 miles per thousand dollars of GDP, down from a high of 240 miles in 1995.[1] In our model, this means an average person drives about 100 miles less each year since 1995, all else being equal. Today, VMT per capita is about 18% lower than it might have been under the old trend, as shown below.

Figure 3. VMT per capita and regression-based estimates. Data sources: FHWA, Census Bureau, Bureau of Economic Analysis and Environmental Information Administration

Figure 3. VMT per capita and regression-based estimates. Data sources: FHWA, Census Bureau, Bureau of Economic Analysis and Environmental Information Administration

While lower gas prices have played a clear role in the recent VMT increase, our final model suggests they have had a much smaller effect than economic factors. Holding everything else constant, the growth in GDP per capita between 2013 and 2015 (3.2%) explains a 3.8% increase in VMT per capita. The change in gas price during the same period, which was considerably larger (-34%), only explains a 1.4% increase in VMT per capita.

The link between driving and GDP has been fairly well established in literature, but their relationship is changing. While economic growth—specifically, people returning to work and spending more—leads to more driving, that link seems to be weakening. Demographic factors and development patterns are causing people to drive less on average, regardless of economic activity. Gas prices also affect people’s driving habits, but much less than in the past. It’s difficult to speculate, but most trends suggest that future VMT growth will be considerably slower than it was several decades ago.

[1] GDP reported as real GDP in chained 2009 dollars

Chris McCahill is a Senior Associate at SSTI.