Suggested Citation:
Lee, Taihyeong and Patricia L. Mokhtarian (2008) Correlations between Industrial Demands (Direct and Total) for Communications and Transportation in the U.S. Economy 1947-1997. Transportation 35 (1), 1 - 22

Using input-output (I-O) accounts provided by the U.S. Department of Commerce, this study investigates the aggregate relationships between the transportation and communications inputs demanded (directly and in total) by all industries in the U.S., and compares the results across time. We analyzed five pairs of Spearman correlations of transportation and communications demands (utilities, manufacturing, and overall) using the direct and total coefficient tables from the ten benchmark input-output years spanning 1947 to 1997. To correctly represent the overall economy-wide relationship, each industry (direct table) or commodity (total table) in the correlation was weighted proportionately to the monetary value of its contribution to the U.S. economy. In the analysis using direct 1-0 coefficients, we found a pattern of predominant complementarity between transportation and communications manufacturing, and substitution between transportation and communications utilities. There are intriguing indications, however, of a shift from substitution to complementarity in the latter case, beginning around 1987. In the analysis using total 1-0 coefficients, we found a pattern of complementarity for all years between transportation and communications manufacturing, and a pattern changing from substitution to complementarity for the remaining four pairs (transportation manufacturing and communications utilities; transportation utilities and communications manufacturing; the utilities pair; and the overall pair). Thus, from the industrial perspective (which constitutes a sizable proportion of the total demand for communications and transportation), it is not realistic in modem times to expect telecommunications to substitute for travel. Nevertheless, further research is needed into the specific causes of the observed shift from substitution to complementarity, and current trends should continue to be monitored for any changes.

Keywords: complementarity, ICT impacts on travel, input-output analysis, substitution