Policy Brief

Transportation Costs and the American Dream


The Surface Transportation Policy Project’s (STPP) report, Transportation Costs and the American Dream, claims increasing transportation costs are threatening the American dream of homeownership. The solution, STPP suggests, is more public transit. The report is based on the Consumer Expenditures Survey, which is regularly published by the Bureau of Labor Statistics. STPP puts its spin on these data to support the group’s agenda to increase spending for public transportation. In fact, a review of the Consumer Expenditures Survey, along with other available data, reveals that the truth is the exact opposite of STPP’s claims.

STPP notes that transportation expenses make up 19 percent of household budgets today. The group implies that this is too much money and suggests it would be less if people used public transit more.

STPP says that transportation expenses made up only 10 percent of family budgets in 1935, 14 percent in 1960, and 19 percent from 1972 through today. Since more urbanites rode public transit and lived in compact cities in 1935, STPP suggests that automobiles and suburban development are responsible for the increase in expenses.

There are several problems with STPP’s analysis. Briefly:

  • STPP fails to account for the benefits of automobiles in terms of boosting personal incomes;
  • STPP ignores other, more reliable sources of data that refute the survey data it cites;
  • STPP’s presumption that public transit costs less than automobiles is dead wrong. The cost of transit per passenger mile is many times greater than autos;
  • STPP fails to recognize that auto ownership is voluntary. In contrast, most public transit costs are paid out of taxes collected from people who rarely, if ever, use transit.

Because transit is so much more expensive than autos, STPP’s prescription of spending more on public transit and less on highways is a far greater threat to the American dream of mobility and homeownership than any nominal changes in the price of automobiles or fuel.