Is Household Transportation Cost Affordable?

On 25 March 2024 Streetsblog posted " How Car Ownership is Keeping  Americans from Financial Security" and reference supporting data from a study conducted by the US government Bureau of Transportation Statistics.

In the government study the cost of U.S. transportation includes the different modes of transportation like rail, transit, ferry, taxi, and private automobiles. These costs represent the total amount households spend on transportation.

Transportation cost is a measure of transportation affordability compared to other household expenditures. A transportation cost burden measures the percentage a household budget spends on transportation after taxes. After taxes is  a better measure of what a household has available to spend on transportation. 

Households are divided into five groups (quintiles) by household annual gross income. The groups are Highest > $245,000  and Lowest < $25,000.

In 2022, transportation was the second largest household expenditure behind housing, accounting for 15% of average household spending. The cost burden fell hardest on households in the lowest group, the household making less than $25,000 spent 30% of their after-tax income on transportation while those in the highest fifth spent 12%, see the chart.

More take-aways from the study:

• Percent of after-tax income spent on transportation, two cases:
  
• Households No Vehicle: Lowest Income -3%  Highest Income -5%
• Households Owning Vehicles: Lowest Income -45% Highest Income -12%
• Vehicle ownership is the greatest burden on low income earners
• The cost burden for rural and urban households is about the same for any income earner but a greater burden for lower earners.
• Over 65 age households cost burden is about 45% of income after taxes.

-LS