I felt like I should pull out Occam's Razor over the weekend when I spotted, via Twitter, some speculation from Joe Weisenthal of Business Insider and later Matt Yglesias of Slate about why the number of vehicle miles driven in the U.S. has been dropping.
Weisenthal toys with out all sorts of correlations to explain the decline — everything labor reductions to gas prices to an aging population...and of course e-commerce! This last part is what Yglesias picked up on. By the time the these two had finished, they'd trotted out no less than ten charts. Here's Matt:
One very interesting social trend we have going on in the United States right now is the decline in vehicle miles traveled, which initially looked like a mere recession thing but seems to be continuing even as the economy has added jobs for the past 18 months. Joe Weisenthal was speculating on twitter that online shopping might be the reason.
And here's Joe:
There are a few different theories. Maybe Americans have adjusted to a new era of gas prices.
Demographics also probably play a role.
Note that there's been a pretty big decline in labor force participation since the mid-2000s, a trend that's in large part attributable to people getting older.
It's not that these aren't all plausible explanations, but I think both Joe and Matt are missing one big factor: the size of the U.S. vehicle fleet has been declining since 2009. You can add to that the age of the fleet, which is now at an all-time high of 11 years on average.
I've borrowed one of the charts from this discussion (above). It's from this post by Doug Short. Weisenthal used it as the more extreme evidence that vehicles miles driven are falling off a cliff in the U.S. The country is at 1997 levels, if you adjust the data for the driving age population — people over 16. In terms of raw data, miles driven peaked in the 2006-2007 period.
This all makes sense if you know that in 2005, North American new vehicle sales topped out at 17.5 million. By 2009, that number had fallen to 10.6 million. In 2011, we almost hit 13 million.
Meanwhile, in 2009, 14 million vehicles were scrapped, reducing the size of the fleet from 250 million total to 246 million. This could be a trend that will continue for the rest of the decade.
So you have a combination of fewer new vehicles sold with more older vehicles laid to rest — ands lots of, to out it bluntly, beaters still on the road that aren't going to reliably rack up the 15,000 miles-per-year that most people put on their cars.
Here's where Occam's Razor — the simplest explanation beats a more complex one — comes in. Americans are driving fewer miles each year...because they have fewer cars to drive them in. At the margins, the overall fleet is also aging and probably less reliable, which is contributing to the decline.
And if we keep scrapping around 14 million cars per year — which seems likely given the overall age of the fleet — we need to sell at least another million vehicles per year to get back to even, in terms of the pace of retiring old cars while adding new cars.
I'm not saying this explains everything. Changing shopping prices, gas prices, demographics — they could all be playing a supporting role. But I think cratered sales, scrappage, and the overall reduction in the size of the U.S. vehicle fleet supplies the simplest explanation for why we're driving less.