Policy Study

Gridlock and Growth: The Effect of Traffic Congestion on Regional Economic Performance

How reducing traffic congestion can add billions of dollars in economic growth to local economies
Policy Study 371

Traffic congestion increases costs to American businesses, workers and families. It increasingly takes more time and fuel to get where we want to go, costing us time and money. As traffic congestion worsens, it will significantly undermine the economic competitiveness of U.S. cities and regions.

Perhaps one reason policymakers have not done more to reduce gridlock is a lack of understanding about how congestion negatively impacts our cities and their competitiveness. What would be the benefits of achieving free-flow travel conditions on a regional scale?

This study examines the economics of congestion relief. The report, authored by David Hartgen and Gregory Fields, finds that reducing congestion can add billions of dollars in productivity and economic output for cities. Free-flowing traffic increases regional productivity, which also increases tax revenues for local governments.

Most major cities will find that wise infrastructure investments that eliminate gridlock and produce free-flowing road conditions will more than pay for themselves by boosting the region’s economy, and thus tax revenues. The study shows that reducing congestion and increasing travel speeds enough to improve access by 10 percent to key employment, retail, education and population centers increases regional production of goods and services by 1 percent. While seemingly small in percentage terms, this leads to tens of billions of dollars for a region’s employers and workers due to productivity and efficiency benefits.

David T. Hartgen

David T. Hartgen is Emeritus Professor of Transportation Studies at UNC Charlotte. Professor Hartgen is widely known in transportation circles. He established UNC Charlotte's Center for Interdisciplinary Transportation Studies in 1989 and now teaches and conducts research in transportation policy and planning. He is the author of about 330 studies on a wide variety of topics in transportation policy and planning, is the U.S. editor of the international academic journal Transportation, and is active in professional organizations. He is a frequent media interviewee in local and national outlets. Before coming to Charlotte he directed the statistics, traffic forecasting and analysis functions of the New York State Department of Transportation and served as a Policy Analyst at the Federal Highway Administration. He holds engineering degrees from Duke University and Northwestern University. He has taught at SUNY Albany, Union College and Syracuse University and lectures widely. His studies of the comparative performance of transportation systems have received nation-wide attention. He has also recently completed a major component of Reason's Mobility Study that estimates the cost of significantly reducing road congestion nation-wide, a comprehensive study of congestion in North Carolina, and a comparative study of the 50 state highway systems . His current research includes an assessment of the economic impact of highways in South Carolina, a review of transportation performance for the provinces of Canada, a national study of business impacts of congestion, and an assessment of congestion in mid-sized cities.

M. Gregory Fields is a retired military officer with degrees from West Point, Webster University in St. Louis, and UNC Charlotte. He is enrolled in the PhD program in Urban Regional Analysis at UNC Charlotte and has participated in a number of comparative transportation studies.