Impacts of Bicycling on the Economy


A number of studies have looked at the high economic cost of automobile travel (even without externalities (such as congestion and environmental costs) factored in) to individuals and communities, as compared to travel by bicycle or transit. The strong connection between auto-dependent, sprawl development and higher costs for transportation has been studied in a report entitled "Driven to Spend: Pumping Dollars out of Our Households and Communities." (Center for Neighborhood Technology and Surface Transportation Policy Project) This study found that households in automobile-dependent communities devote more than 20% of household expenditures to surface transportation (more than $8,500 annually), while those in communities with more accessible land use and more multi-modal transportation systems spend less than 17% (less than $5,500 annually), representing a savings of thousands of dollars a year.

Bicycling (and walking) are, then, relatively inexpensive means of travel, costing the individual as little as $0.07 and $0.04 per mile respectively (in 1996 dollars) (Litman), while automobile cost averages $0.32 per mile.

The societal, or public, costs of bicycling versus automobile travel show an even greater discrepancy between them. These costs indicate clearly that increasing bicycling (and walking) in a community can have substantial economic benefits for the community at large. In addition to lower infrastructure, maintenance, and operation costs, a comprehensive trail system, bikeway system, or continuous sidewalk network can increase community livability and economic vitality, improving access to shopping, employment, and increasing property values – thereby benefiting the local economy through increased tax revenues (Litman). In a survey of business owners in an urban retail district, another study found that 65% consider arterial bike lanes to provide overall economic development benefits, compared with 4% that consider it overall negative, and 65% support expansion of the program in their area (Drennen).

In a report entitled, "The Benefits of Bicycling in Minnesota," the estimated annual economic benefits of bicycling for the state of Minnesota are summarized thus:

TABLE 4.1:

Estimates of Total Annual Benefits of Bicycling in Minnesota

  Total benefits Adults Children
User non-monetary $240 million $130 m. $110 m.
Reduced medical costs $24 million $13 m. $11 m.
Productivity gains $8 – 24 million $8 – 24 m. $0
Economic impacts Approx. 900 jobs,
$30 million payroll
Minor benefits Approx. $3 m. $2.5 m. $0.5 m.


A list of and links to various articles and studies on the economic benefits of bicycling is available at the University of Minnesota, Hubert H. Humphrey Institute of Urban Affairs' website:

There is mixed academic evidence concerning the relationship of bicycle facilities and the value of nearby land. A recent study of this issue in Minnesota found no significant relationship, positive or negative, between land value and the presence of nearby bicycle facilities (Poindexter et al). Other examinations have found some examples of positive impacts on land value, and others where no change in land value occurred (Webbel). While there is some anecdotal evidence from around the Chicago region that bicycle facilities have caused increases in land value, further study is needed to demonstrate these relationships.

What impacts have bicycle facilities in your community had on land value, either through studies or anecdotal evidence? Are you aware of any local or national studies of the linkage between bicycle facilities and value? Beyond land value, what impact do you think bicycling has on the local and regional economy?