Have we passed peak travel?

Most economists understand is that growth in mobility and travel has for centuries signalled growing prosperity. Indeed, measures of transport miles are often used as indicators of economic activity.  The graph below is from Millard-Ball and Schipper’s 2010 article on trends in per capita vehicle miles, showing the strength of this relationship since 1970 in a selection of developed countries.

But what the authors also observed was a turning point in the relationship around 2003.  Was it peak travel, or a sign that such an event is around the corner?

On theoretical grounds, some analysts expected a peak in transport demand.  Millard-Ball and Schipper note this argument.

Unless travel speeds increase, the fixed number of hours in a day and the consistent average of 1.1 hours per day that people devote to travel (Schafer and Victor, 2000) preclude ever-rising travel activity. But even if travel speeds do increase, declining marginal utility to new destinations implies that there exists some saturation point for travel demand. While in the past, higher speeds from infrastructure improvements have been used to access more distant destinations rather than reduce aggregate travel times, this relationship may no longer hold (Metz, 2010).

From their research, this theoretical peak, or saturation point, appears to have occurred.

“Since 2003, motorized travel demand has leveled out or even declined in most of the countries studied, and travel in private vehicles has declined,” the authors wrote in their study. “Car ownership has continued to rise, but these cars are being driven less.”

“My basic thesis is, ‘There ain’t room on the road.’”

But I wouldn’t be so fast in declaring that travel has peaked.  For starters, it hasn’t.  It is simply that the growth in travel is occurring at a lower proportion of GDP growth.  One could blame the measurement of GDP itself for the kink in the trend (I would definitely would point the finger at this as one contributing factor).

Most importantly, the impact of changing modes of transport provides a key explanation. Below we can see that total passenger kilometres per capita, across road vehicles, bus, rail and domestic air travel, all continue to rise.  These countries are also prime candidates for the ‘travel saturation’ thesis, particularly with respect to road transport.  One can only imagine that in the developing world the trends in travel growth are even more acute.

Australia’s standout growth in air travel can bee seen below, with growth in domestic passenger kilometres typically exceeding GDP growth, with the trend predicted to continue.

A final factor that needs consideration is the rise of international air travel, which is excluded from the study.

If there is any one factor that symbolises development and progress it is our propensity to travel – for business or leisure. I can’t see this centuries long trend reversing in a hurry, but one needs to understand the subtly shifting global travel trends in order to better interpret economic data.

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  1. The rail trends in US are somewhat anaemic when put in context of its size. Is air travel more economical or adequate infrastructure in rail is lacking. My guess, a bit of both.

    As for its relationship with growing prosperity, I agree that measurement of GDP itself definitely has something to do with flat lining travel in some countries as depicted in top graph. But, declining proportion of travel kilometres as a % of GDP could also be an indication of rising efficiency requiring less travel. Fibre internet and its numerous native applications seem to be one category of disruptive events.

    Interesting Stat.

  2. Google Bern Grush, “Less is More: The US $10 Gallon”.

    It is online as a PDF, hard to link to.

    Grush predicts that there will be a VMT “rebound effect” as oil-replacing technologies reach critical mass.

    We have actually had massive scope already to trade off vehicle size and performance and comfort, and maximise the benefit of technology, to retain our “automobility” in the face of rising oil prices. Oddly enough, we do not seem to have done much of this. V8’s and large SUV’s seem to find willing buyers.

    The increased reliability of vehicles as they age has brought automobility to lower and lower income earners; this is another phenomenon that is often not noticed. The cost of fuel is actually a low proportion of the “total costs of automobility” – a high proportion is “depreciation”, which is copped by wealthy new car buyers. Low income earners main obstacle to achieving “automobility”, used to be the repair costs and low reliability of the old cars they could afford to buy.

  3. darklydrawlMEMBER

    I worry a bit about the longer term viability of air travel for us common folk if the peak oil scenarios play out as expected.

    Will my kids kids get to fly around like we do? I don’t know.

    Clearly advancements in technology are going to help, but flying might once again become the domain of the very rich or fortunate.

  4. My friends don’t drive 4 to 8 to 12 hours up the coast on holidays any more. (I am grey nomadding over winter but drive less during teh time I am in Sydney)

    They fly to Europe or Asia or even Cairns or the Gold Coast.

    Are plane miles included in the vehicle miles?