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Economic Impacts on Local Businesses of Investments in Bicycle and Pedestrian Infrastructure: A Review of the Evidence

UCD-ITS-RP-21-29

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Suggested Citation:
Volker, Jamey and Susan L. Handy (2021) Economic Impacts on Local Businesses of Investments in Bicycle and Pedestrian Infrastructure: A Review of the Evidence. Transport Reviews: A Transnational Transdisciplinary Journal 41 (4), 401 - 431

Local officials in North America frequently face opposition to new or expanded bicycle or pedestrian facilities. The most vocal opponents are usually motorists and local business owners who fear that the removal of or reductions in vehicular parking or travel lanes will reduce patronage from motorists and that any increased patronage from pedestrians or cyclists will not offset the lost revenues. A lack of direct evidence on the economic impacts of facilities on local businesses has made it difficult to support or debunk such fears. A lack of quantitative evidence in particular has prevented the incorporation of such impacts into cost–benefit analyses. The issue has received enough attention from researchers in recent years that a review of the evidence is now warranted. We reviewed the relevant literature and identified 23 studies, focusing on the US and Canada, that either (1) quantified and compared consumer spending between active travellers and automobile users (n = 8), or (2) quantified an economic impact to local businesses following the installation of bicycle or pedestrian facilities (n = 15). Taken together, the studies indicate that creating or improving active travel facilities generally has positive or non-significant economic impacts on retail and food service businesses abutting or within a short distance of the facilities, though bicycle facilities might have negative economic effects on auto-centric businesses. The results are similar regardless of whether vehicular parking or travel lanes are removed or reduced to make room for the active travel facilities. The studies also highlight best practices for designing future research. Ten of the 15 studies that quantified an economic impact to local businesses used both before-and-after data and comparison sites or other statistical controls for variables unrelated to the active travel facility “treatment;” six of those used statistical testing.

Key words: Bicycle facilities, pedestrian facilities, active travel, local business, economic impacts