Information Technology and Transportation: Substitutes or Complements?

Oliver, Atara Stephanie (2013): Information Technology and Transportation: Substitutes or Complements?

Abstract

The increased availability and prevalence of Information and Communications Technology (ICT) provides opportunities to use such products as substitutes for transportation. Common examples of this substitution are telecommuting, video conferences, and online classes. However, despite the intuitive appeal of a substitution relationship existing between ICT and transportation, prior research has indicated that the relationship between ICT and transportation is quite complex; at times ICT substitutes for travel and at other times ICT and travel complement each other. Therefore, using a Quadratic Almost Ideal Demand System (QUAIDS) model and data from the US Consumer Expenditure Survey and the Consumer Price Index, I analyzed the effect of ICT expenditures on transportation demand. The analysis indicates that ICT may serve as a substitute for air travel, but primarily serves as a complement for private transportation. Overall the data supports a complementary relationship between ICT and transportation, which indicates that an increase in technology may increase rather than decrease the negative externalities associated with transportation.

• Item Type: MPRA Paper
• Language: English
• Keywords: Transportation, Consumer Expenditures, Information Technology
• Subjects: D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences ; Diffusion Processes; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R22 - Other Demand; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R4 - Transportation Economics > R41 - Transportation: Demand, Supply, and Congestion ; Travel Time ; Safety and Accidents ; Transportation Noise

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