Exploring the Relationship between Combined Household Housing and Transportation Costs and Regional Economic Activity in Virginia

Thomas W Sanchez

doi:10.3390/land10070742

Abstract

Transportation is the second-largest expenditure category for households, accounting for nearly 20 cents of every dollar spent annually across the U.S. Only housing costs exceed transportation, and combined they represent a substantial burden on households. A primary economic connection between housing and transportation costs is related to the tradeoffs that households make in terms of residential location and what they have left of their household budget to spend on other needs. Families are forced to spend thousands of dollars annually on owning and operating private vehicles, forego wealth creation, and the ability to enjoy other benefits of homeownership. This analysis examines combined housing and transportation costs at the state level to regional economic performance. It contributes to the literature by testing the geographic scope of household expenditure burdens at this scale. Along with previous literature, this analysis provides evidence about the connection between the local and regional economic vitality and the burden of the combined effects of housing and transport on households. Overall, the results suggest that, from 2008 to 2018, these household cost burdens were a function of economic activity, household characteristics, and location in the state of Virginia.

Highlights

Transportation is the second-largest expenditure category for households, accounting for nearly 20 cents of every dollar spent annually for households in the United States [1]
A primary economic connection between housing and transportation is related to the tradeoffs that households make in terms of residential location and what they have left of their household budget for other needs
The growing literature suggests that the housing and transportation cost burdens negatively impacting households have implications for local and regional economic vitality

Summary

Introduction

Transportation is the second-largest expenditure category for households, accounting for nearly 20 cents of every dollar spent annually for households in the United States [1]. As families are forced to spend thousands of dollars annually on owning and operating private vehicles (which are rapidly depreciating assets), they have less money to invest in homeownership, hindering wealth creation and the ability to enjoy other benefits of homeownership. This is the first analysis of its type to examine combined household housing and transportation costs to economic performance at the state level. This has implications for transportation infrastructure investments, housing development planning, and regional economic planning. Research, and practice have treated housing and transportation costs separately despite a relatively long history acknowledging the trade-off between housing and transport costs in urban economics

Methods

Results

Discussion

Conclusion