Effect of Gasoline Prices on VMTs (Vehicle Miles Travelled): An Exploratory Analysis of Northern Virginia Traffic Based on Granger Causality

Abstract

From the 2nd quarter of 2007 onwards through much of the 2008, U.S. consumers experienced an unprecedented hike in gasoline prices. It is believed that this may have changed the travel demand behaviour resulting in less vehicular travel traffic. For eg., the U.S. DoT’s monthly statistics at the state and national level have shown a net decline of more than 100 billion Vehicle Miles Travelled (VMT) in 2008 compared to 2007. However, the U.S. DoT statistic is based on just a few thousand locations spread across more than tens of thousands miles of road network. In other words, while such sparsely located measurements may not be representative of the actual travel behaviour across the U.S., it is difficult to gauge any changes in VMTs at the regional and sub-regional level.

We propose a novel approach to study regional and sub-regional changes in VMTs based on changes in regional gasoline prices using Granger causality tests. For this purpose we use weekly traffic counts on major traffic corridors in a region as a proxy for the VMTs. The weekly traffic counts are computed based on actual vehicle counts collected at vehicle sensors throughout the year on major corridors in the Northern Virginia road network. The study results are presented through a series of charts and maps.

Keywords: Granger causality, econometrics, VMT, ADMS