These Cities Have The Highest Transportation Costs
A year and a half into the pandemic, COVID-19 is still having profound effects on the global economy. The abrupt shutdown of many aspects of daily life from last spring has diminished. Even so, the economic recovery has been inconsistent, affecting supply and demand differently across sectors. This unsteady path to economic recovery has stoked fears of inflation, as prices in many sectors are showing dramatic fluctuations and challenging household spending. And one area where these economic effects are clearly evident is in spending on transportation. What cities spend the most on transportation costs?
Data from the Consumer Price Index, a common measure of inflation, reveals the extent of the pandemic’s effects on household transportation spending. Gasoline prices collapsed last spring in the wake of COVID-19 shutdowns but began to recover as motorists returned to the roads later in the summer of 2020. Meanwhile, the market for new and used cars has been one of the most notable economic stories coming out of the pandemic. With global supply chain breakdowns dating back to early 2020, many car manufacturers have been unable to obtain the parts needed to produce typical numbers of new vehicles. With the shortage of new cars, used vehicles have seen dramatic increases in value, with a 45% increase in prices from June 2020 to June 2021.
Even before the pandemic hit, American households spent more than $10,000 per year on transportation, according to Bureau of Labor Statistics (BLS) data. The largest share of this figure is vehicle purchases, which account for about 39% of transportation spending. That comes out to nearly $4,200 per household per year. The “other vehicles expenses” category, which includes leases and maintenance, averages $3,400 per year. And fuel costs account for an additional $2,100 per year. With vehicle prices spiking and gas prices recovering to their pre-pandemic levels, it seems likely that typical household transportation spending will increase in the months and years ahead.
Some of these differences are a function of geography. The Northeast is more densely populated than the West, which allows for shorter travel distances and makes public transportation more viable. Other differences are economic: total household spending is lower in the Midwest and South than in the Northeast and West, so spending on transportation takes up a larger share of the total. Transportation spending is not evenly distributed across the U.S., however. When the U.S. is divided into four regions, it is the West that spends the most on transportation in dollars, at $11,210 per household per year—more than $700 greater than the national average. As a share of household spending, however, residents in the South take the top spot, devoting 18.1% of household expenditures toward transportation each year.
To identify the metropolitan areas that spend the most on transportation, researchers at CoPilot analyzed data from the BLS on the nation’s largest 22 metros. Researchers calculated total transportation spending as a share of total household spending in each location. In the event of a tie, the metro with the higher total transportation spending was ranked higher. Nationally, transportation spending accounts for 16.8% of total household spending, but this value is typically lower in major population centers.
Read the full study here
Here is how the nation’s largest metros stack up on transportation costs spending:
