Impact of Rising Fuel Prices on U.S. Transit Ridership

Abstract

As gasoline prices have risen to unprecedented levels over the past 2 years, many transit agencies have claimed that higher fuel prices have driven ridership growth. It is determined first whether such a correlation is substantiated by the available data and then, if such correlation exists, the nature of this relationship. Five U.S. cities were selected for analysis on the basis of their level of automobile orientation and the extent and variety of transit services: Atlanta, Georgia; Dallas, Texas; Los Angeles, California; San Francisco, California; and Washington, D.C. Most of the transit systems in the five cities analyzed have experienced ridership growth since early 2004. Exceptions include the Atlanta bus and heavy rail systems and the San Francisco bus systems. With the use of time series analysis, seasonal indices, and correlation coefficients, ridership trends are evaluated and compared with corresponding national fuel prices. With the exceptions of the modes cited above and the Virginia Railway Express commuter rail in Washington, D.C., the correlation between ridership and fuel prices is statistically significant for all systems. This finding indicates that fuel price increases have indeed played a role in encouraging transit use in historically automobile-oriented American cities. Finally, the empirical relationships between fuel price and transit demand are explored. Results indicate that, on average, as fuel price increases by 1%, transit demand increases on the order of 0.24%; in other words, ridership increases approximately 0.09% for each $0.01 increase in fuel price.