Economic Impact on Walking & Biking in Vermont

EconomicImpactofBicyclingandWalkinginVermont

Public Meeting March 15, 2012via Vermont Interactive Technologies

Economic &Policy Resources, Inc.EPR

Economists, Policy and Financial Analysts

VERMONT®

AGENCY OF TRANSPORTATION

2

MeetingLogistics

Streaming The page contains a chat room (below the live stream) which can be used to ask questions. 

VIT sites Brattleboro Middlebury Randolph Center Rutland White River Junction

Williston Montpelier Newport  Springfield

3

StudyPurpose

To estimate the annual economic impacts of bicycling and walking in Vermont.

Business

Environment

Real estate

Health

Transportation system

4

VermontOverview

Population ~620,000

2009 GDP = $24.6B

2009 employment = 418,673 jobs

2009 labor earnings= $16.6B

5

2010VermontGDPbyPrivateIndustrySector

Source: US Bureau of Economic Analysis

6

Methodology

Avoided Transportation Consumer  Costs

Real Estate Value

Bike/Ped Facility Capital Investment

Visitor Spending Related to Bike/Ped

Bike/Ped Related Businesses

Avoided Transportation Public  

Costs

Jobs

Labor Earnings

State Budget Fiscal Impact (VEGI)

General Description Other Costs and 

Benefits

Economic Input/Output Model

(REMI)

WhenAppropriate

Input: Reliable

Output

Input: Reliability to be determined

Output

7

Bicycle/PedestrianInfrastructure/ProgramInvestment

2009 VTrans data

Dedicated B/P projects like shared use paths, bicycle lanes, etc. 

Roadway projects that impact B/P: bridge sidewalks, shoulder widening, etc.

Program expenditures: SRTS, Share the Road, recreational trail guides, etc.

8

Bicycle/PedestrianInfrastructure/ProgramInvestment

Results

$17M output

233 jobs

$10M in labor earnings

9

Bicycle/Pedestrian‐RelatedBusinesses

Manufacturing

Retail, including repair & maintenance shops

Mountain biking & hiking trail centers

Tour operators

Bike clubs, trail associations, advocacy groups

10

Bicycle/Pedestrian‐RelatedBusinesses

Manufacturing

Retail, including repair & maintenance shops

Mountain biking & hiking trail centers

Tour operators

Bike clubs, trail associations, advocacy groups

Output=$56M  Jobs=1,025 Labor earnings=$26M

11

VisitorSpending

40 major events in 2009

Attracted over 16,000 participants 

45,000 associated family & friends

Lodging, retail, food, etc.

Over 2/3 of spending from out‐of‐state visitors

12

VisitorSpending

40 major events in 2009

Attracted over 16,000 participants 

45,000 associated family & friends

Lodging, retail, food, etc.

Over 2/3 of spending from out‐of‐state visitors

Output=$9.5M Jobs=160 Labor earnings=$4.7M

13

StateBudgetFiscalImpact

Effect of B/P activities on state budget = $1.57M

$1.54M to General Fund

$28,600 to Transportation Fund

14

StateBudgetFiscalImpact

Effect of B/P activities on state budget = $1.57M

$1.54M to General Fund

$28,600 to Transportation Fund

FY 2009 state budget = $4.3B

$1.2B of which is General Fund

$228M of which is Transportation Fund

15

StateBudgetFiscalImpact

Effect of B/P activities on state budget = $1.57M

$1.54M to General Fund

$28,600 to Transportation Fund

FY 2009 state budget = $4.3B

$1.2B of which is General Fund

$228M of which is Transportation Fund

0.04% of state budget

0.13% of General Fund

0.01% of Transportation Fund

16

AvoidedTransportationSystemCosts

Consumer: vehicle operating costs, depreciation, purchase price

Public: pollution, water quality, noise impacts, parking, health

Methodology: 

1. Estimate amount of annual walking & biking in VT.

2009 National Household Travel Survey:

– Miles walked in VT ~68,000,000 (average)

– Miles biked in VT ~28,000,000 (average)

2. Calculate cost savings due to walking or biking instead of driving.

17

AvoidedTransportationSystemCosts

Obtained per mile unit costs for each variable 

For example, consumer cost of vehicle ownership per mile, public cost of air pollution per mile traveled

Applied unit costs (step 2) to miles traveled (step 1)

AreaAvoided Auto Travel Costs

Added Biking Associated Costs

Added Walking Associated Costs Net Change

Urban (53,577,546)$       4,295,967$            22,914,907$        (26,366,672)$       Rural (52,655,360)$       7,281,010$            37,304,476$        (8,069,874)$         Total (106,232,906)$     11,576,977$          60,219,383$        (34,436,546)$       

18

AvoidedTransportationSystemCosts

Transportation system cost savings: based on assumption that all walking/biking trips replace automobile trips

However, trip might not happen if mode is unavailable  reduced accessibility. 

Assumes trip distance is equivalent regardless of mode.

Travel time unit cost for auto does not include time for parking and walking to destination.

19

EffectofWalkability onRealEstate

Statistical model of all houses sold in VT, closing price, walkability score, job density & median household income

Estimated effect of walkability score on property value where job density is greater than 110 jobs/sq.mi. (urban):

Results for rural areas determined to be unreliable

Preliminary estimate of walkability impact on property in VT is $350M 

20

Results

Real Estate Value

Bike/Ped Facility Capital Investment

Visitor Spending Related to Bike/Ped

Bike/Ped Related Businesses

Jobs

Labor Earnings

Output

Economic Input/Output Model

(REMI)

Input Output(results for one typical year)

Avoided Transportation Consumer  Costs

Avoided Transportation Public  Costs

Considered but not included in model State Budget 

Fiscal Impact

21

Results

Real Estate Value

Bike/Ped Facility Capital Investment

Visitor Spending Related to Bike/Ped

Bike/Ped Related Businesses

Jobs1,418

Labor Earnings$41M

Output$83M

Economic Input/Output Model

(REMI)

Input Output(results for one typical year)

Avoided Transportation Consumer  Costs

Avoided Transportation Public  Costs

Considered but not included in model

State Budget Fiscal Impact 

$1.6M$43M

$42M

$350M

22

Conclusions

Bicycle/pedestrian oriented activities contribute less than 1% to the state’s economy.

Avoided Transportation System Costs: $84M

Real Estate Impact: $350M

Infrastructure expenditures $15.334M Program 

expenditures $1.622M

Events $9.476M

Businesses $56.312M

Total Output = $82.7M

23

Conclusions

$1M in infrastructure spending generates ~23 jobs

$1M in program spending generates ~32 jobs 

Bike/ped businesses are very seasonal

Bike/ped tourism represents <1% of total visitor expenditures in VT Photo: Local Motion

24

Conclusions

Transportation system cost savings estimates require:

– A better unit cost for travel time

– A better understanding of how car trips are replaced by bike/walk trips (distance and ratio)

25

Conclusions

A methodology for rural areas is needed to improve the estimate of walkability impacts to property values.

Future research could consider the impact on wealth effects.

Photo: Local Motion

26

Conclusions

Comment period ends 

Thursday, March 29th, 2012

Comments can be sent to: vteconbp@rsginc.com