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The Impact of Fuel Prices on Transit Ridership

The Impact of Fuel Prices on Transit Ridership

Many people in Hampton Roads are reliant on the car for their livelihood. Whether it is to go to work, to shop, or to run to the beach in the summer, the majority of people in Hampton Roads rely on the auto to get them there. In fact, in 2010, 80.9% of Hampton Roads residents relied on the auto to get to work. This represents a 2.5% increase since 2000 (Source: US Census Bureau).
 
There are various modes of public transportation available as alternatives to the car in the Hampton Roads region. Public transportation in Hampton Roads includes:

Public Transportation Models

From this array of transit services available in Hampton Roads, there are approximately 1.6 million passenger trips monthly across the regional public transportation system in 2010 (Source: National Transit Database).

As part of a larger national study, Bradley Lane of the University of Texas at El Paso conducted research exploring the relationship between fuel prices and transit ridership. Lane notes in his research, ‘[For] every 10 percent increase in fuel costs led to an increase in bus ridership of up to 4 percent, and a spike in rail travel of up to 8 percent. These results suggest a "significant untapped potential" for transit ridership.’

Evaluating fuel prices and transit ridership trends in Hampton Roads from January 2005 through October 2011, similar results to the Lane study can be found. As fuel prices rose 129% between January 2005 and July 2008, transit ridership increased 50%. Similarly, as fuel prices dropped 60% between July and December 2008, transit ridership decreased 20% in the same period.

Fuel Prices and Transit Ridership in Hampton Roads January 2005 to October 2011

Source: Federal Transit Administration National Transit Database
Source: AAA Fuel Gauge Report

As per Eric Jaffe's reporting in The Atlantic, Lane's analysis revealed two key relationships between gas prices and transit ridership. The first is what he calls an elasticity, which is essentially a behavioral response to an event. In this case the event is a change in gas prices, and the response is a shift in transit ridership. The second is what he calls a "lagged effect." That means that some elasticities — such as switching your commute from car to train — don't appear until several months after the initial change in fuel cost.

 

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