Streetcars and the Error of Confusing Correlation vs Causation
On January 20, I will participate in a panel discussion of the Kansas City streetcar sponsored by the American Public Square. I am eager to participate and hope you can attend.
To their credit, Kansas City's streetcar aficionados rarely make the claim that streetcars are good transit. They aren't. They are woefully expensive for the service they offer, are inflexible, and are slow. Bus rapid transit such as the MAX on Troost is a much more effective method of moving people.
In Kansas City and elsewhere, the matter comes down to one of correlation versus causation. Streetcar proponents want desperately to claim that the streetcar causes economic development downtown. It doesn't. In fact, all sorts of literature in the United States and around the world fails to show that streetcars cause economic development. There might be a correlation, however, as economic development often occurs along streetcar routes. Why? Because cities such as Kansas City lard their streetcar routes with all sorts of taxpayer subsidies such as tax increment financing and property tax abatements that are much more likely to drive development. Economic development may occur along streetcar routes, but it is not caused by them.
In fact, a 2010 study sponsored by the Federal Transit Administration found that,
The literature regarding empirical measurement of actual changes in economic activity, such as changes in retail sales, visitors, or job growth, is almost nonexistent for streetcars.
This finding undercuts the primary claim made by advocates of streetcars—that they spur economic development. The same report adds,
Given that federal funding for streetcars emphasizes economic development, along with many local policymakers’ objectives to stimulate economic development, the literature is particularly weak on impacts of streetcars on economic development, such as the attraction of jobs, retail sales, and tax revenue.
In Kansas City, officials have strung together a laughable list of projects supposedly caused by the streetcar. We've debunked them here and here and here. While there may be a correlation between development and the streetcar, it isn't plausible to claim that the streetcar caused the development.
Consider that in the 2013 and 2014 seasons up to May 22, 2014, when ground was broken on the Kansas City streetcar line, the Royals record was 109-99, for a winning percentage of .524. Since the streetcar tracks were laid, however, the Royals went 183-126, including two World Series appearances and one world championship. That's a winning percentage of .592. If I suggested that the relationship between the streetcar construction and Royals’ success was one of causation—the streetcar caused the Royals to win two pennants and the World Series—I'd be laughed out of the room.
Yet this is exactly the sort of specious argument streetcar proponents make when they point to downtown development. The progress of the streetcar and the Royals’ success may run in parallel, but there is no relationship between them or among their causes. Like the streetcar and many developments attributed to it, the relationship is illusory.
