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Posts tagged with: "TRFVOLUSM227NFWA"

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If they drive, they will park (Or if they park, they will drive?)

Correlation does not always equal causation

This graph shows that the more people drive, the more they park and generate revenue for parking lot and garage operators. While there’s clearly a correlation between these two indicators, it isn’t clear that there’s a straightforward causality between them. In fact, a third indicator may be affecting the other two: the number of cars in use, the size of the road network, economic activity in general, commuting distance… Or maybe it’s a combination of all or some of these. This ambiguity is what makes statistical analysis much more complex than simply looking at correlations in a graph. FRED helps you stay rigorous by allowing you to download data into your favorite statistical software, either with a download from FRED itself (for example, via the “Download Data” link below the graph) or natively from the software of your choice. For starters, you can use this published data list.

How this graph was created: Search for and select “parking lot revenue” and click on “Add to Graph.” From the “Edit Graph” menu, search for “GDP deflator” in the “Customize data” section and add the series, applying formula a/b. Then from the “Add Line” tab, search for and add “vehicle miles.” Finally, from the “Format” tab, place the y-axis of the second line on the right side.

How this data list was created. For starters, you need to (create and) log on to a FRED account. Then, from any account page, click on “Add new” and select “Data list.” Give it a name. Then search for the series, check the series you want, and click on “Add to data list.” Repeat until satisfied. You can make the data list public and will be required to give it a public name.

Suggested by Christian Zimmermann.

View on FRED, series used in this post: GDPDEF, REVEF81293TAXABL, TRFVOLUSM227NFWA

Gas prices and transportation habits

When gas prices rise, do Americans park their cars and take the train?

Millions of Americans purchase gasoline each day and make choices about how much to drive, if at all. A basic premise, found in any high school economics textbook, suggests that a rise in the price of something increases the demand for its substitutes. So we might expect the use of public transit to be correlated with gas prices: When gasoline gets more expensive, car travel does too; so, shouldn’t consumers opt for a cheaper alternative, such as public transit? The data shown in the graph, however, don’t reveal anything so clear: When gas prices increase, we might expect a corresponding decrease in vehicle miles traveled and an increase in public transit usage. But that isn’t the case.

The graph tracks the percent change in the price of gas, public transit ridership, and vehicle miles traveled over the past five years. When gas prices have increased, so have public transit ridership and vehicle miles traveled: Americans were both driving more and making greater use of public transit. Seasonally adjusted data on gas prices aren’t available, so that lack of adjustment may explain some of this variation. Consider that Americans travel more in the spring and summer, which is shown by the tendency of all three indicators to spike in March and for transit ridership and vehicle miles both to increase throughout the summer months.

What happens when gas prices decrease? During those times, the relationship between gas price, vehicle miles, and transit use is even less clear, serving as a reminder of the other factors at play in the everyday decisions of Americans. For example, in December 2014, gas prices decreased over 13% while public transit ridership and vehicle miles traveled continued to increase. The price of gas fluctuates often, but the daily obligations of Americans are pretty steady: Commuting to work or school, visiting family, or shipping goods may not change significantly. The convenience of travel options, availability of infrastructure, employment and income levels, and seasonal opportunities are far more influential on transportation habits than the price of gas alone.

How this graph was created: Search for “conventional gas price” and choose the monthly series. From the “Edit Graph” tab / “Add Line” option, search for “public transit” and add the “not seasonally adjusted” series. Add the third line by searching for “vehicle miles” and choosing “Vehicle Miles Traveled (not seasonally adjusted).” From the “Edit Line” option, change the units to “Percent Change” and click “Copy to all.” Adjust the view to the five years starting with January 1, 2012.

Suggested by Maria Hyrc.

View on FRED, series used in this post: GASREGCOVM, TRANSIT, TRFVOLUSM227NFWA

Fun fact: vehicle miles traveled

While teaching students, you may find it helpful to locate “fun facts” to call out data that illustrate the topic at hand. (This blog poster had fun reading with her youngest son, who’d point out these facts and read them aloud, starting with the phrase “Fun fact…”) FRED is the perfect tool for highlighting economic facts because it has so many different categories of economic data. For instance, let’s look at transportation. Fun fact: The number of vehicle miles traveled relative to the population old enough to drive has been declining for a decade.

How this graph was created: This FRED graph requires a simple transformation. Find “Vehicle Miles Traveled,” add population to that line, and divide the first series by the second. There are several choices for population: Here we use the “Civilian Noninstitutional Population,” which includes everyone above age 16 who is not in the military or institutionalized.

Suggested by Katrina Stierholz

View on FRED, series used in this post: CNP16OV, TRFVOLUSM227NFWA

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