Friday, October 24, 2008

Roadways as an Economic Indicator

Dr. Paul Kedrosky, who authors the Infectious Greed blog (and is also an investor, writer, entrepreneur, speaker, and an analyst for CNBC), published a post today about the economy. Specifically, Dr. Kedrosky has noticed that traffic on Southern California roads has been a lot lighter than even just a few weeks ago. Dr. Kedrosky noted that California (especially Southern California) has entered the recession earlier than most states.

To support his hypothesis about the decline in traffic in California, Dr. Kedrosky analyzed some data from CalTrans/PeMS that shows a road traffic decline over the past year.

This is the graph that Dr. Kedrosky included on his blog post:

I think this is a really interesting conversation. During the last economic downturn (during the '00-'02 "dot-com" bust), I worked at a company located on Route 128. I knew a lot of people were out of work, but I was always surprised at how much traffic was on Route 128 - both in peak and off-peak hours. Even now, during the whole summer gas issue and now economic situation, the roads still seem to be full of cars here in the metro-Boston area.

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