Economists working on transportation often focus on the city or region as a cohesive entity, which benefits from improvements in the efficiency of transportation. There is very good evidence that regions with lower transportation costs and better local and regional accessibility are higher economic performers. However, very few people experience the economy in terms of regional output or total area incomes. For most households, a strong and vibrant economy is about nearby shopping options, their own commute, and maybe a vibrant main street. This difference between how economists and policymakers experience the economic benefits of transportation and how households and individual workers do raises questions about the choices of questions asked, tools employed, metrics tracked and results communicated.

The Regional Perspective

When we look at a regional economy usually the scale is something similar to a Metropolitan Statistical Area or Metropolitan Planning Organization boundary — often several counties and municipalities. Regional economic analysis becomes less useful at a scale where there are significant amounts of goods and people entering and exiting the region. To talk about how a transportation change affects a regional economy, we want to be reasonably confident that most of the benefits of the change accrue to people and firms in the region. This let’s us talk about economic leakages without too much noise from transportation leakages.

There are a few major drivers of economic impact from transportation at the regional level: travel cost, accessibility and connectivity, and resiliency.

• Travel costs include recurring and non-recurring delay; fuel, maintenance, tolls and other operating costs; and costs at the ends of trips such as parking and freight handling costs.
• Accessibility and connectivity are related but slightly different. We talk most frequently about labor market access in terms of the labor pool that employers in the regions key employment center have access to. In some cases, we’re more interested in the supplier or delivery market that a site has in terms of goods movement. Connectivity on the other hand is about the link to specific nodes, like an airport or intermodal transportation center.
• Resiliency at a regional level can often be improved through redundant routes for a single road or the availability of multiple modes. Things like Intelligent Transportation Systems equipment can also make a network more resilient to incidents or fluctuations in demand.

The vast majority of regional economic transportation analysis has been done based on the very first thing in the list above — recurring delay due to capacity constraints. There are generally good tools for estimating this characteristic of travel costs and estimating it’s impact on business. In general, the regional perspective is mostly concerned with on-the-clock travel time because this has a monetary cost in the economy. The costs of personal passenger trips often play a much smaller role than freight and goods movements and business travelers.

The Local (Neighborhood) Perspective

Most people spend a significant portion of their lives in two different neighborhoods — the one where they live and the one where they work. In general, whether one drives or takes public transportation to their place of work, if it’s outside their residential neighborhood, they probably aren’t overly concerned with the economic fabric along the way. The size of a neighborhood could change a little from place to place, but probably needs to include at least most of the amenities and services necessary to residents. This means it’s probably bigger in less dense areas, where you have to travel farther to the grocery store, parks, schools, banks, and other personal services. It’s smaller in dense areas, and probably depends more on the quality of local walking, biking and transit conditions.

The local economic perspective is probably been best represented in real estate economics in which the value of a location is heavily determined by its ability to attract people. Overall, it’s concerned with a broader range of transportation costs. I mean transportation costs here rather then travel costs for the regional perspective as well. Locals are much more concerned about the travel of others — not just because traffic could affect their own mobility — but also because other people affect the quality of the neighborhoods air, noise levels, the availability of parking, and neighborhood safety. These are largely external costs that aren’t experienced by the traveler. A neighborhood economic perspective is also much more concerned about travel purposes besides business and commuters. Unless the neighborhood is a central business district, it depends on peoples personal business and leisure trips to be economically vibrant. This means that in order to be attractive for all trip purposes and a variety of people, neighborhoods are worried about transportation impacts in terms of externality costs to almost the same degree as time and monetary costs.

While a region can be economic strong by making a large commuter shed available for major employment industries, neighborhoods care about accessibility and connectivity on several different levels as well. They need to be connected to specific employment centers, but they also need to have very local connections as well. Whereas at the regional scale transportation infrastructure almost exclusively can be considered a benefit to mobility, at a smaller scale residential areas can be disconnected from services by transportation infrastructure. It’s not just that highway viaducts might bisect areas that might otherwise be a cohesive neighborhood. Walking and biking have a lot of potential to serve local trips and get people outside and interacting with each other to create a vibrant community — but if arterial or even connector streets lack sidewalks and crossing points people won’t be able to make that connection with their communities and may travel to regional commercial destinations instead of building a vibrant neighborhood economy.

Thinking about these challenges requires a completely different set of tools than assessing regional economic competitiveness. Usually projects are only address from one side though — big projects with regional impacts overlook local impacts, and real estate development projects only think about a few blocks around them (if that). The challenge is that the funding agencies doing analysis often don’t line up with these two perspectives in spatial terms.

The Other Local

When talking about the local scale, it wouldn’t be uncommon to think about the municipal scale. However, municipalities, like counties and other politically determined boundaries, vary so much from place to place that it can be difficult to do any kind of consistent analysis. A geographically compact municipality probably is most worried about economics from the neighborhood perspective. A geographically large political entity on the other hand probably disproportionately frames its concerns from the regional perspective. Because of this variation, it’s important to think of spatial units of analysis in terms of people’s experiences rather than politically defined boundaries.

The challenge is to get the state, county and municipal governments to think about the neighborhood perspective and how vibrant neighborhoods contribute to their missions. Often, which there is strong local control below the neighborhood level, decisions are made without any regard for the regional effects. Regional governance is very limited in most of the United States, making these concerns almost as unrepresented or uncoordinated as neighborhood issues.

Our most common clientele for regional economic impact assessment is the state government, but they often feel the need to apply the same tools to rural regions as urban regions, which creates an eternal tension. Regardless of who we work for, helping air out these competing perspectives and discussing the goals of analysis will lead to better outcomes. New data and tools are also providing new options to bring these perspectives together more frequently, something I look forward to doing more in the future.