The impact of residential density on vehicle usage and energy consumption

We specify and estimate a joint model of residential density, vehicle use, and fuel consumption that accounts for both self selection effects and missing data that are related to the endogenous variables. Our model is estimated on the California subsample of the 2001 U.S. National Household Travel Survey (NHTS). Comparing two California households that are similar in all respects except residential density, a lower density of 1000 housing units per square mile (roughly 40% of the weighted sample average) implies an increase of 1200 miles driven per year (4.8%) and 65 more gallons of fuel used per household (5.5%). This total effect of residential density on fuel usage is decomposed into two paths of influence. Increased mileage leads to a difference of 45 gallons, but there is an additional direct effect of density through lower fleet fuel economy of 20 gallons per year, a result of vehicle type choice.