Evaluating TDM Criticism


TDM Encyclopedia

Victoria Transport Policy Institute


Updated 16 March 2011

This chapter evaluates various criticisms of TDM. These include claims that reduced vehicle travel harms consumers, that it is regressive and unfair to lower-income motorists, that it is an unjustified intervention into free markets, that TDM is harmful to economic development, that it is ineffective, and that transit improvements are excessively expensive and unjustified. Although some criticisms many be true in certain circumstances, they do not apply to appropriately planned TDM programs and strategies.



People Need to Drive

Critics often cite an example of a high value trip (freight and business travel, commuting to school and work, visiting family and friends) as evidence that reducing automobile travel is harmful to consumers. But the existence of some high-value vehicle trips does not disprove the existence of many low-value vehicle trips that can be reduced. Given better travel options and efficient incentives, many people will significantly reduce their automobile travel. For example, some people would like to walk, bicycle, use transit or telework rather than drive for some trips if they were more convenient or affordable. Similarly, a consumer might drive across town to a distant store or restaurant if roads are free and uncongested and parking is free, but if not will shop or eat closer to home (see Transportation Elasticities for information on the price sensitivity of vehicle travel).


TDM is not intended to eliminate all automobile use or an arbitrary set of vehicle trips: an efficient TDM program reduces low value automobile trips (that is, automobile trips that consumers consider of relatively low value either because the trips themselves are not very important or because they can be shifted to another time, mode or destination with little net loss), and so are most willing to forego in response to incentives. High value vehicle trips continue, and are often facilitated due to reduced traffic and parking congestion.



People Want to Drive

Critics often claim that “Americans (or Canadians, British, Germans, etc.) love the mobility provided by driving,” or, “Americans prefer big homes and wide opens spaces available in suburbs.” But there are all sorts of Americans with a wide range of travel and housing preferences. At the margin (that is, relative to current transport and land use patterns), many would prefer to drive less, use alternatives more, and living and live in more Accessible communities. For every indicator that Americans are hopelessly in love with driving and suburbs, there is another indicator that Americans want better alternatives. For example, homes in New Urbanist communities tend to command a higher value, communities with good transit service are experiencing increased transit ridership, and many Resort Communities are attractive due in part to their walkability.


Much of the evidence that Americans prefer automobile travel and sprawl development ignores the tradeoffs involved. Sure, many consumers would like to drive more and live in larger homes, if somebody else pays, but their preference for such improvements disappears, and their willingness to use other modes increases if they are required to pay the incremental costs.


Put another way, reduced automobile travel and shifts to other modes can provide savings to governments and businesses. For example, shifting a peak-period trip from automobile to public transit, ridesharing or nonmotorized modes can often save several dollars in avoided roadway and parking costs. When commuters are offered these savings, many prefer to drive less and use alternative modes more (Commuter Financial Incentives). It is therefore wrong to suggest that all Americans want to drive more and live in suburbs: many would prefer to drive less and live in more urban neighborhoods, provided that they have good options to choose from, and efficient pricing that reflects the incremental costs and savings involved in their decisions.



TDM Harms Consumers

Some critics claim that Transportation Demand Management is harmful to consumers and an unfair punishment to motorists (Orski, 2000; Mills, 1999; Green, 1995 Spindler, 1997; Dunn, 1998). They argue that automobiles are a superior form of transportation so any effort to reduce driving reduces consumer welfare. This argument ignores the fact that many TDM strategies use positive incentives, and the possibility that consumers may sometimes prefer to drive less and use transportation alternatives more.


The majority of TDM strategies rely on positive incentives, as illustrated in Table 1. These positive incentives improve the transportation and land use options available to consumers or provide financial rewards to reduce vehicle use. With such incentives, consumers who continue driving are no worse off, and those who reduce mileage must consider themselves directly better off or they would not change their transport patterns.


Table 1          Direct Consumer Impacts

Positive Incentives


Negative Incentives

Alternative Work Schedules

Bike/Transit Integration


Commuter Financial Incentives

Guaranteed Ride Home

Improved Security

Location Efficient Mortgages

New Urbanism

Park & Ride

Pay-As-You-Drive Insurance

Pedestrian and Cycling Improvements


School Trip Management

Shuttle Services

TDM Marketing


Transit Improvements

Transit Oriented Development

Access Management

Carfree Planning

Comprehensive Market Reforms

HOV Priority

Parking Management

Smart Growth

Street Reclaiming

Traffic Calming


Fuel Tax Increases

Parking Pricing

Road Pricing

Vehicle Use Restrictions

Most TDM strategies use positive incentives: they improve transportation options or provide new rewards for reduced driving. Motorists who continue their current travel patterns are no worse off, and those who reduce their mileage must be directly better off or they will not change their travel patterns. These are in addition to indirect benefits to motorists, such as reduced traffic congestion, facility costs and pollution emissions, and benefits to non-motorists from reduced crash risk.



These direct consumer benefits are in addition to indirect benefits such as reduced congestion, facility cost savings, reduced pollution emissions, and increased traffic safety. As a result, motorists who do not change their travel patterns can also benefit from TDM programs.


Motorists can benefit from improved Transportation Options, even if they don’t currently use them. Improved transport options reduces traffic and parking congestion, pollution and crash risk, and the amount of chauffeuring motorists must perform for family and friends (Transit Evaluation). Many motorists value having options that can be used in an emergency (a vehicle failure, financial or medical problems that limit driving), just as passengers on a ship value having lifeboats that they may never actually use. This is called “option value”, and results in a more flexible and Resilient transportation system.


Put another way, during a typical lifecycle there are times when alternative travel options tend to be particularly important, including teenage and young adult years, during periods of economic or physical constraints, and late in life when a smaller home is preferable and driving becomes more difficult. These periods are increasing due to later marriage and child rearing, and longer lifespans.


Motorists also benefit from TDM when it is the most cost effective solution to transportation problems (Least-Cost Planning). TDM can reduce congestion, road and parking facility costs, crash risk and pollution emissions, all problems facing motorists. As a result, it is perfectly rational for people to support improved travel choices and TDM incentives even if they rely on automobile transportation themselves.


Most strategies that involve negative incentives are economic transfers (Fuel Tax Increases, Parking Pricing and Road Pricing are costs to motorists but provide revenues elsewhere in the economy) and so their overall impacts depend on how revenues are used (Evaluating Pricing). If revenues are returned to consumers as rebates or reduced taxes, motorists as a group are no worse off, and those who reduce their vehicle use are directly better off. The only real negative is the incremental transaction costs associated with direct user charges, and these are declining with more sophisticated Pricing Methods. Unpriced roads and parking facilities are not really free, consumers pay for them indirectly through taxes, higher prices for retail goods and as a substitute for other employee benefits. Thus, the choice is not really between the benefits of free facilities and the costs of priced facilities, but rather, between direct and indirect facility costs. Charging users directly for roads and parking facilities gives consumers a new opportunity to save money. If you drive less, you save money, an option that is not available if consumers pay indirectly. This is more economically efficient and equitable than funding facilities indirectly (Market Principles).


Most TDM programs include both positive and negative incentives. This tends to be most effective. As with any policy change, some individuals may experience more benefits and others more costs, but a well-planned TDM program can result in overall net benefits (more winners than losers).


Economic Optimality (Market Principles)

Optimality reflects the concept of “diminishing returns,” which recognizes that the incremental benefits provided by a good tend to diminish with increased consumption. This means that either too little or too much consumption of a good can be harmful. For example, just because you enjoy eating a piece of cheesecake does not mean that eating two pieces will double your enjoyment and four pieces will quadruple it. Similarly, just because driving provides consumer benefits does not necessarily mean that more driving is better or that driving should be subsidized. Even people who often enjoy driving often value having alternative travel options available.



Although motor vehicle use provide significant benefits, there is considerable evidence that at the margin (i.e., relative to current levels of vehicle use), many consumers would prefer to drive somewhat less and rely more on alternative modes if they are given better Transportation Choices and rewards for reduced driving. For example, positive financial incentives, such as Parking Cash Out, induce some commuters to change their travel habits, although their participation is entirely voluntary. New Urbanist developments, which offer more diverse transportation choices, have higher property values than conventional developments.


Given suitable options, consumers will choose to drive less and rely more on alternative modes. The portion of trips made by automobile varies significantly from one town or city to another, depending on land use and transportation policies, not just wealth, as indicated in Table 2. This suggests that it is possible to reduce per capita land use and vehicle travel by creating communities that provide the best of both worlds: automobile transportation when it is appropriate, with good transportation choices and incentives to use other modes when they are most economically efficient. To the degree that TDM increases transportation and land use choices, and encourages more economically efficient use of resources, it increases consumer welfare.


Table 2          Mode Split in Urban Areas (Pucher and Lefevre, 1996, p. 16)



































































The portion of urban trips made by car varies significantly from one city to another due to differences in land use and transportation policies.



TDM is Regressive and Unfair to Disadvantaged Populations

Green (1995) and Pisarski (1999) argue that women and minorities benefit from increasing automobile use, and so TDM is unfair to these disadvantaged groups. They assume that TDM consists only of restrictions on consumer choice that force disadvantaged groups to forego desired transport options. They ignore TDM strategies based on positive incentives that directly benefit users, many of which tend to be particularly valuable to people who are economically, physically or socially disadvantaged. Many TDM strategies increase transportation Affordability and improve travel options for non-drivers.


For example, a $50 monthly Parking Cash Out benefit represents a proportionally greater increase in income for a $25,000 per year clerk than for a $100,000 per year manager. Similarly, people with lower incomes and physical disabilities often place a high value on improved transit, ridesharing, cycling and walking conditions because they already use these options or would in order to save money, if given the opportunity. People with physical disabilities can particularly benefit from Universal Design, Pedestrian Improvements and Traffic Calming.


Women tend to particularly value TDM strategies such as Alternative Work Schedules, Guaranteed Ride Home, Improved Security, Ridesharing, Pedestrian Improvements, School Trip Management, Telework, and Transit Improvements, because they improve transportation choices and provide greater flexibility. Research by Novaco and Collier (1994) found that women are more likely to prefer alternative commute modes such as Ridesharing and Transit as a way to avoid stress. The National Organization for Women promotes Pay-As-You-Drive Insurance as a more equitable way to deal with gender differences in mileage and crash rates. Since all of the strategies mentioned here are optional, any reduction in vehicle travel that results reflects participant preferences and consumer benefits.


Some TDM strategies involve regressive fees. For example, Parking Pricing, Road Pricing and Increased Fuel Taxes represent a greater portion of income to a poor motorist than to one who is wealthy. However, they are not necessarily more regressive than other fees or funding mechanisms, particularly if there are good travel alternatives that allow lower-income people to avoid them (Pricing Evaluation). For example, funding a new suburban highway through a user toll is often less regressive than through an increase in general taxes, since few poor people drive on suburban highways, particularly if good transit and ridematching services are available. In addition, TDM strategies that increase demand for transit and ridesharing tend to benefit people who are transportation disadvantaged by improving the quality of these travel alternatives (Kain, 1994).



TDM Is An Unjustified Intervention In Free Markets

Some critics argue that TDM is an unjustified intervention in free markets. This assumes that the current transportation market is optimal, and so any change must reduce market freedom. But there are significant distortions in current transportation and land use markets that favor automobile travel (Market Principles). Many TDM strategies correct these market distortions directly, or represent “second best” solutions to offset such distortions. Market Reforms, Institutional Reforms, Regulatory Reforms, Efficient Pricing, Parking Management are examples of TDM strategies that are intended to correct market distortions and help create more open and competitive markets.



TDM is Harmful to Economic Development

Critics sometime claim that, since increased automobile travel is associated with economic growth, TDM must be harmful to economic development. But this is not necessarily true (TDM and Economic Development). TDM strategies can increase transportation system efficient, reduce overhead costs for businesses and governments, and shift consumer expenditures to goods that provide more economic development benefits. To the degree that TDM strategies reflect Market Principles, such as improved consumer choice, competition, cost-based pricing and neutral public policies, they increased productivity and economic competitiveness.



TDM is Ineffective

Some critics argue that TDM strategies are ineffective and wasteful, and so resources should be shifted from demand management to roadway capacity expansion (Orski 1999). They make statements such as, “For more than a decade transportation planners have badgered Americans (or Canadians, Southern Californians, Germans, etc.) to carpool (or ride transit, bicycle, walk, telecommute, give up their cars, etc.) but automobile traffic continues to grow.” Such statements misrepresent the issue. It is comparable to asking a doctor who treated a case of athlete’s foot on a broken leg why the patient still cannot run: the treatment may be worthwhile, but by itself cannot be expected to solve the larger problem.


When Evaluating transportation management strategies it is helpful to differentiate between their travel impacts (the change per affected person or business) and take up (also called penetration), which reflects how broadly the strategy is applied. For example, Parking Cash Out typically reduces automobile use by 15-20% among commuters where it is applied, but it is not widely applied, so its effects on total travel been small. Critics sometimes complain that TDM is ineffective, citing continued transportation problems such as congestion and pollution in cities that claim to have TDM programs. However, this does not reflect a lack of impacts where TDM is implemented, rather it is a lack of take up of the strategies: few motorists actually face TDM strategies such as Parking Cash Out, Parking Pricing or Road Pricing. The problem is not that TDM has been tried and failed, but rather, that it has not really been tried in most regions. Although many communities have implemented some TDM strategies, those that are administratively and politically easy, few have implemented comprehensive TDM programs that include the full range of cost-effective strategies. When it is appropriately implemented, TDM programs often reduce 10-30% of vehicle trips at a particular site, and a comprehensive regional TDM program can be even more effective (Success Stories).


Conventional transportation improvement strategies also provide relatively modest benefits. For example, multi-billion dollar investments to expand urban highways will often do little to reduce regional Congestion, and does less to address other transportation problems facing communities. Vehicle design improvements have reduced per-mile Crash Rates, but this has been largely offset by increased per capita mileage. Although vehicle pollution controls have substantially reduced per-mile Vehicle Emission rates, this is partly offset by increased vehicle mileage, and so urban regions continue to experience significant pollution problems. When all impacts are considered, TDM is often the most cost-effective solution to transportation problems (Why TDM).


Critics often use a reductionist analysis, that only considers one or two objectives, such as congestion or air pollution reductions, when comparing TDM against other transport improvement options (Pickrell, 2001). TDM tends to provide multiple benefits, so considering just one or two objectives understates its full value (Comprehensive Transportation Planning). On the other hand, conventional transportation solutions often reduce one problem, but exacerbate others, so their net value is much smaller than indicated by an analysis that focuses on just one or two objectives (Evaluating TDM). For example, increasing highway capacity and traffic speeds may reduce traffic congestion, but it tends to degrade the pedestrian environment, and it often induces additional traffic that can increase pollution emissions and crash costs over the long term (Rebound Effects). Similarly, fuel efficiency standards may reduce per-mile energy consumption, but by reducing vehicle operating costs they tend to increase total vehicle mileage, increasing traffic congestion and crashes (Litman, 2006a).


When considered individually, the impacts of most TDM strategies appear modest, affecting just a few percent of total vehicle travel. However, their effects are cumulative and synergetic. A comprehensive TDM program that includes an appropriate combination of complementary strategies can have significant impacts and is often the most cost effective solution to common transportation problems when all costs and benefits are considered (Least Cost Planning).


The apparent effectiveness of a TDM program is affected by the perspective and scale of Evaluation. For example, a particular Commute Trip Reduction program might reduce vehicle trips at participating worksites by 20%, representing 50% of downtown employees, where 10% of regional employees are located. Commute trips usually represent the majority of peak-period highway travel, but only about a third of total automobile travel. As a result, this program could be described as reducing 20% of trips a participating worksites, 10% of downtown commute trips, 2% of regional peak-period highway travel, or less than 1% of total regional travel. From a regional perspective the program may seem of little significance, although a major investment to increase highway capacity typically affects a similar portion of trips. As a result, it could be considered equal in value to multi-billion dollar expenditures on new roads and parking facilities, and it may be the most cost effective regional transport investment available.


Many communities have implemented individual TDM strategies that are worthwhile investments, such as Commute Trip Reduction programs, Rideshare Promotion, Transit Improvements, Walking and Cycling Encouragement, but virtually no community has implemented the full range of TDM strategies that are technically feasible and economically justified. Even jurisdictions committed to TDM, such as the Netherlands, New York City and Portland, Oregon, have implemented just a modest portion of the total range of cost effective TDM strategies. The results are what would be expected: lower rates of per capita automobile travel than what would otherwise occur (particularly among particular groups or along particular corridors), but significant vehicle traffic problems continue. These areas still have major Market Distortions that result in excessive automobile use, such as Unpriced Roads (although a few major bridges and highways are tolled, their price structure is designed to maximize revenue rather than manage demand, and the vast majority of roadways are unpriced), Subsidized Parking (although free parking may be less abundant in such areas, a significant portion is still unpriced or underpriced) and fixed Vehicle Insurance and Registration Fees.


Critics who claim that TDM is ineffective are generally only considering the modest programs that are commonly implemented (i.e., voluntary Commute Trip Reduction Programs, Walking and Cycling Promotion, etc.), while ignoring more effective TDM strategies such as pricing and land use management. There is little doubt that they can have significant travel impacts, and that they can be justified on a variety of economic, social and environmental grounds (Travel Elasticities and Land Use Impacts on Transport).


Critics might argue that such solutions are politically unacceptable, but this creates a self-fulfilling prophecy: if experts dismiss these strategies early in the planning process because they are considered politically unacceptable, they can never be considered by the general public. Only by considering such strategies in a Comprehensive Transportation Planning process can their full potential benefits be considered. Twenty years ago, few people would have predicted the development of recycling programs, or the restrictions that now exist on smoking in public buildings. Similarly, TDM solutions, including pricing strategies and land use management, may become far more common in the future.


Individual TDM strategies have proven effective and cost effective (Success Stories), and comprehensive TDM programs that include a variety of individual strategies can make a major contribution to solving regional or national transportation problems. The question is not, “Can TDM solve transportation problems,” but “How much will we allow TDM to solve transportation problems.” TDM is limited by its institutional and political acceptance, not by its technical feasibility or cost effectiveness.


Regulation vs. Pricing

The following is an email exchange between Dr. Mark Delucchi and Todd Litman comparing regulatory and pricing or TDM solutions to transportation problems that occurred during a “New Paradigms Dialogue” sponsored by the Transportation Research Board’s Transit Cooperative Research Program during February 2002.


On 2/16/02, Mark Delucchi wrote:

I would like to provide some final guidance on thinking about the effectiveness of regulation vs. pricing. We do know more theoretically, and by some modeling results, then has been acknowledged here.


First, let's be clear what we are asking about. We are asking (for example) whether the emissions regulations that have been adopted in this country have resulted in significantly more emissions reductions than we would have achieved had we in 1970 priced emissions at estimated marginal damage costs instead. Or, whether adding taxes to imported oil to reflect estimated externalities of oil use will result in more or less energy savings than large but arguably cost effective increases in CAFE. Or, finally, whether safety standards and drunk driving laws have saved more lives than would have pricing to incorporate accident externalities (which, incidentally, are quite difficult to estimate).


Price changes can affect emissions, oil-use, or accidents in three ways. First, an increase in the price of anything correlated with driving distance will tend to reduce driving. This may be called the VMT-reduction effect. Second, putting a price on emissions, oil use, or accident externalities will tend to make consumers choose cleaner, more efficient, and safer vehicles from among the existing mix of vehicles. Finally, in theory manufacturers will recognize that consumers ought to be willing to pay more for emission control, efficiency, or safety features than before, and hence will devote more resources to making all vehicles cleaner, more efficient, and safer.


Now, we have on the one hand a reasonably good sense of the benefits of regulation. We also have some data and modeling to indicate how the cost of driving affects demand for driving, and some information on how the cost of fuel affects the choice of vehicles. What I haven't seen analyzed for transportation is the third effect: the response of manufacturers to changes in fuel prices, emission prices, or accident prices.


We know that emissions regulation has reduced national emissions by more than 90% for most pollutants, and we know that CAFE standards can (cost effectively, some argue) cut oil use in transport in half. We also know that the VMT-reduction effect of emissions pricing or oil pricing will be on the order of 10-20% at most, nationally. Put another way, no one can seriously argue that correct emissions or oil taxes will reduce VMT by 90% or even 50%!! Turning now to the vehicle choice effect, we know that differences in uncontrolled emissions among vehicles is small compared to the difference between uncontrolled and controlled vehicles, so that there is no way that shifting to cleaner uncontrolled vehicles could reduce emissions much. And regarding energy use, discrete choice modeling done by the California Energy Commission indicate that the VMT-reduction and vehicle choice effects of a gasoline tax result in several fold less energy use than does increased CAFE.


Thus far we have shown that regulation has much more effect on emissions and energy use than does the VMT-reduction and vehicle-choice effects of pricing. That is, the implementation of emission-control technology or fuel-efficiency technology does far more to reduce emissions or oil use than does VMT reduction or switching models. So, the question becomes simply this: which is the most effective way to get emission-control technology or fuel-efficiency technology: by direct regulation, or by indirect demand-side pricing? The answer to me is obvious, although I can't say that I have seen any empirical work on this.


I believe the same can be said about safety regulation vs. accident externality pricing.


Hope this helps!



Mark Delucchi

Research Scientist

Institute of Transportation Studies

University of California



On 2/20/02, Todd Litman wrote:

I agree with Dr. Delucchi that if each transportation problem is considered individually (i.e., from a “reductionist” perspective), it usually appears that regulation is more cost effective than pricing. However, when a more comprehensive approach is used that considers the full range of impacts together, the value of pricing increases and the value of simple regulation declines. My conclusion is that a combination of regulation and pricing is usually best.


For example, as Dr. Delucchi describes, emission pricing by itself only justifies a modest reduction in VMT and emissions. Modeling by the late Greig Harvey predicts that a fee based on measured tailpipe emissions, which averages about one cent per vehicle-mile (but higher for more polluting vehicles) would reduce mileage by about 2%, but energy consumption would decline by 7% and air pollution emissions would decline by almost 20% (Harvey and Elizabeth, 1998). This is smaller than the emission reductions that have been achieved in the past through regulations, (although most technology experience diminishing marginal returns so it is likely that that regulations may be less cost effective for achieving additional emission reductions).


When other costs and benefits are considered, the value of pricing tends to increase. For example, road and parking pricing, weight-distance fees and Pay-As-You-Drive insurance, can be justified on congestion reductions, facility cost savings and equity objectives, and so their emission reductions are provided at zero incremental cost. A study I was involved in indicates that these pricing reforms if implemented to the degree that each is justified on efficiency grounds could reduce total VMT by about a third (Litman, Komanoff and Howell, 1998).


Pricing actually provides more comprehensive emission reduction benefits. The pollution control regulations only reduce tailpipe emissions, and actual emission reductions tend to be significantly lower than emission tests indicate due to deterioration over time. Some other emissions, such as tire and brake particulates and road dust, are related to VMT.


Most regulatory strategies reduce just one or two problems, and they often have unintended consequences that exacerbate other problems (Litman, 2005). On the other hand, pricing strategies tend to help address several problems. Only when all of these impacts are considered can we conclude which combination of strategies are truly optimal.


For example, a 50% increase in average vehicle efficiency from CAFE standards would increase VMT by about 10% (based on a -0.2 elasticity of VMT wrt pre-mile fuel cost). Although this still leaves a 40% net reduction in energy consumption, it will increase other traffic impacts, including congestion, road and parking facility costs, crashes, urban dispersion, traffic noise and non-tailpipe air pollution by about 10% each. Is the energy savings worth these increased costs? Not according to most cost estimates, which put air pollution and energy externalities among the middle-range costs, below crash costs, road and parking facility costs, and about equal to congestion costs (Litman, 2001).



Greig Harvey and Elizabeth Deakin (1998), “The STEP Analysis Package: Description and Application Examples," Appendix B, in USEPA, Technical Methods for Analyzing Pricing Measures to Reduce Transportation Emissions, USEPA Report #231-R-98-006, www.epa.gov/clariton.


Todd Litman (2001), Transportation Cost Analysis: Techniques, Estimates and Implications, Victoria Transport Policy Institute (www.vtpi.org). Also see “Transportation Costs”, Online TDM Encyclopedia, Victoria Transport Policy Institute (www.vtpi.org/tdm/tdm66.htm), 2002.


Todd Litman (2005), “Efficient Vehicles Versus Efficient Transportation: Comparing Transportation Energy Conservation Strategies,” Transport Policy, Volume 12, Issue 2, March 2005, Pages 121-129; at  VTPI (www.vtpi.org/cafe.pdf).


Todd Litman (1998), Charles Komanoff and Douglas Howell, "Road Relief; Tax and Pricing Shifts for a Fairer, Cleaner, and Less Congested Transportation System in Washington State," Climate Solutions, www.climatesolutions.org.



Transit is Excessively Expensive and Unjustified

Some critics argue that Transit investments, particularly new urban rail projects, are not cost effective and require excessive public subsidies. They point out that such projects require large subsidies per additional rider, and are not the most cost effective way to solve a particular problem such as traffic congestion or air pollution. But such criticism tends to ignore several significant points (Transit Evaluation).


Public transit is like a house: it has many functions and offers many benefits. Just because people generally sleep in their home does not mean that sleeping is the only function of a house, or that homes should be judged simply on the number, size and quality of their bedrooms. In addition to sleeping, homes provide a place to cook, eat, visit and perform various types of work, as well as providing storage space and investment value. In addition some people own houses that they rent for income, cottages that they use for recreation, and guest houses that they maintain to accommodate visitors.


Similarly, public transit provides many different functions and benefits to society. It can help reduce traffic congestion, road and parking facility costs, consumer costs, crash risk, energy consumption and environmental impacts, provide mobility for non-drivers, help create more accessible land use patterns, and provide mobility in emergencies. Because of these multiple benefits, a greater subsidy per trip may be justified than for an automobile trip that does not provide such benefits.


Most transit is provided under urban-peak travel conditions, where costs of all modes tend to be high. Although the subsidy required for an additional peak-period urban transit trip is high, the full Cost of accommodating an additional peak-period urban automobile is also high.


Transit can be far more efficient and cost effective when implemented with other TDM strategies (Transit-Oriented Development, Commuter Financial Incentives, Road Pricing, Pedestrian Improvements, etc.), since transit tends to experience significant economies of scale. A transit project that appears cost ineffective in current markets may become cost effective as part of a comprehensive TDM program.


Rail transit can provide a catalyst for more efficient land use, which can provide additional vehicle travel reductions and environmental benefits. Relatively high per-trip subsidies may be justified for transit investments that support long-term transportation and land use objectives.


Although subsidies per transit passenger-mile may appear high, transit-dependent people travel about a third as much as motorists per year, so their per capita annual subsidy is usually lower than that received by motorists, particularly if roads, parking and other external costs are considered.


This is not to suggest that all transit projects are worthwhile or optimal. However, it is important to consider these additional factors when evaluating the benefits and cost effectiveness of transit investments and subsidies.




Many arguments used by critics of TDM are technically incorrect or only apply in some situations. Transportation Demand Management strategies can be effective and provide significant direct and indirect benefits to a community. Of course, when implemented inappropriately TDM programs can be wasteful and unfair. To be effective, TDM strategies must be thoughtfully planned and implemented. However, it is wrong to dismiss TDM in general as being harmful to consumers, regressive or wasteful.





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CFTE (2005), Building Communities Through Public Transportation: A Guide for Successful Transit Initiatives, Center for Transportation Excellence, for the Public Transportation Partnership for Tomorrow (www.cfte.org/Building_Communities.pdf).


Wendell Cox (1999), The President’s New Sprawl Initiative: A Program in Search of a Problem, Heritage Foundation (www.heritage.org).


Wendell Cox (2003), Performance Indicators In Urban Transport Planning, Competition and Ownership in Land Passenger Transportation, Public Purpose (www.publicpurpose.com/t8-gbc.pdf).


James Dunn (1998), Driving Forces; The Automobile, Its Enemies and the Politics of Mobility, Brookings Institute (www.brookings.org).


Tony Dutzik, Benjamin Davis and Phineas Baxandall (2011), Do Roads Pay for Themselves? Setting the Record Straight on Transportation Funding, PIRG Education Fund (www.uspirg.org); at www.uspirg.org/news-releases/transportation-news/transportation-news/washington-d.c.-myth-busted-road-costs-not-covered-by-gas-taxes.


Kenneth Green (1995), Defending Automobility: A Critical Examination of the Environmental and Social Costs of Auto Use, Reason Foundation (www.reason.org).


John Kain (1994), “Impacts of Congestion Pricing on Transit and Carpool Demand and Supply,” in Curbing Gridlock, TRB, National Academy Press (Washington DC; www.nas.edu/trb), p. 502-553.


Douglass Lee (1992), “An Efficient Transportation and Land Use System,” in Privatization and Deregulation in Passenger Transportation: Selected Proceedings of the 2nd International Conference, Espoo, Finland.


Todd Litman (1999), Evaluating Criticism of Transportation Costing, VTPI (www.vtpi.org); at www.vtpi.org/critics.pdf.


Todd Litman (2003), Evaluating Criticism of Smart Growth, VTPI (www.vtpi.org); at www.vtpi.org/sgcritics.pdf.


Todd Litman (2004), Rail Transit In America: Comprehensive Evaluation of Benefits, VTPI (www.vtpi.org); at  www.vtpi.org/railben.pdf.


Todd Litman (2004b), Evaluating Rail Transit Criticism, VTPI (www.vtpi.org); at  www.vtpi.org/railcrit.pdf.


Todd Litman (2005), “Efficient Vehicles Versus Efficient Transportation: Comparing Transportation Energy Conservation Strategies,” Transport Policy, Volume 12, Issue 2, March 2005, Pages 121-129; at  VTPI (www.vtpi.org/cafe.pdf).


Todd Litman (2006a), Transportation Cost and Benefit Analysis: Techniques, Estimates and Implications, Victoria Transport Policy Institute (www.vtpi.org/tca).


Todd Litman (2006b), “Transportation Market Distortions,” Berkeley Planning Journal; issue theme Sustainable Transport in the United States: From Rhetoric to Reality? (www-dcrp.ced.berkeley.edu/bpj), Volume 19, 2006, pp. 19-36; at  www.vtpi.org/distortions_BPJ.pdf.


Todd Litman (2006c), The Future Isn’t What It Used To Be: Changing Trends And Their Implications For Transport Planning, Victoria Transport Policy Institute (www.vtpi.org); at www.vtpi.org/future.pdf; originally published as  “Changing Travel Demand: Implications for Transport Planning,” ITE Journal, Vol. 76, No. 9, (www.ite.org), September, pp. 27-33.


Todd Litman (2007), Socially Optimal Transport Prices and Markets, VTPI (www.vtpi.org); at  www.vtpi.org/sotpm.pdf.


Todd Litman (2008), A Good Example of Bad Transportation Performance Evaluation, Victoria Transport Policy Institute (www.vtpi.org); at www.vtpi.org/per_ind.pdf.


Todd Litman (2009), Where We Want To Be: Home Location Preferences And Their Implications For Smart Growth, Victoria Transport Policy Institute (www.vtpi.org); at www.vtpi.org/sgcp.pdf.  


Todd Litman (2009b), Are Vehicle Travel Reduction Targets Justified? Evaluating Mobility Management Policy Objectives Such As Targets To Reduce VMT And Increase Use Of Alternative Modes, Victoria Transport Policy Institute (www.vtpi.org); at www.vtpi.org/vmt_red.pdf.


Todd Litman (2009c), “Response to Alan Pisarski’s article ‘The Nexus of Energy, Environment and the Economy: A Win, Win, Win Opportunity’” (www.ite.org/mega/JB09AA30.pdf), ITE Journal (www.vtpi.org/ITE_letter_may2009.pdf).


Todd Litman (2010), Contrasting Visions of Urban Transport: Critique of “Fixing Transit: The Case For Privatization”, Victoria Transport Policy Institute (www.vtpi.org); at www.vtpi.org/cont_vis.pdf.


Todd Litman (2011), The First Casualty of a Non-Existent War: Evaluating Claims of Unjustified Restrictions on Automobile Use, and a Critique of 'Washingtons War On Cars And The Suburbs', Victoria Transport Policy Institute (www.vtpi.org); at www.vtpi.org/carwars.pdf.


Todd Litman and Allen Greenberg (2000), Response to Mark Delucchi’s “Should We Try to Get the Prices Right?” published in ACCESS 16, Spring 2000, Victoria Transport Policy Institute (www.vtpi.org).


Barbara McCann (2000), Driven to Spend; The Impact of Sprawl on Household Transportation Expenses, STPP (www.transact.org).


Edwin S. Mills (1999), “Truly Smart Growth,” The Illinois Real Estate Letter, Vol. 13, No. 3, Summer.


Raymond Novaco and Cheryl Collier (1994), Commuting Stress, Ridesharing, and Gender: Analyses from the 1993 State of the Commute Study in Southern California, University of California Transportation Center (Berkeley), Working Paper #208 (www.uctc.net).


Randal O’Toole (2009), The Citizen's Guide to Transportation Reauthorization, American Dream Coalition (http://americandreamcoalition.org); at http://americandreamcoalition.org/CitGuide.pdf.


Kenneth Orski (2000), “Can Alternatives to Driving Reduce Auto Use?” Innovation Briefs, Vol. 11, No. 1, Jan/Feb 2000.


C. Kenneth Orski (1999), “In Search of ‘Livability’ – A Commentary,” Transportation Quarterly, Vol. 53, No. 4, Fall 1999, pp. 7-13.


Don Pickrell (2001), “Clearing the Air: To Reduce Automobile Pollution, Adjust the Car, Not the Driver,” TR News, Transportation Research Board (www.trb.org), March-April, 2001, pp. 32-34.


Alan E. Pisarski (1999), Cars, Women, and Minorities; The Democatization of Mobility in America, Competitive Enterprise Institute (www.cei.org).


Gabriel Roth (1996), Roads in a Market Economy, Avebury.


Michael D. Setty and Leroy W. Demery, Jr. (2003), Commentary On Wendell Cox’s “Lexus Argument” Public Transit (www.publictransit.us/cadocs/politicaldebates/coxlexus.htm).


SGA, Responding to the Critics (www.smartgrowthamerica.org/critics.html) Smart Growth America.


Z. A. Spindler (1997), Automobiles in Canada; A Reality Check, Canadian Automobile Association (www.caa.ca).


James  Q. Wilson (1997), “Cars and Their Enemies,” Commentary, July, pp. 17-23.


Paul Weyrich and William Lind (2001), Twelve Anti-Transit Myths: A Conservative Critique, Free Congress Research and Education Center, Smart Growth America (www.smartgrowthamerica.org/weyrich3.pdf).

This Encyclopedia is produced by the Victoria Transport Policy Institute to help improve understanding of Transportation Demand Management. It is an ongoing project. Please send us your comments and suggestions for improvement.




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