Project Objective:

The Rutgers team proposes to develop an econometric model to test whether a correlation with a lag effect exists between truck movements on the NJ Turnpike and various economic time series data. It will also assess the feasibility of producing a freight index and publishing this index on an ongoing quarterly basis for the larger New York/New Jersey region. Using an existing model of New Jersey?s economy that is provided by the Rutgers Economic Advisory Service (R/ECON), truck movement data will be provided by the NJ Turnpike so that the project team can examine the feasibility and investigate the relationship between truck movements and the performance of the New Jersey economy.

Investigating this relationship and collaborating with the NJ Turnpike will produce a ?first of its kind? project that should advance the understanding and value of freight to our economy. Using a student researcher from the Center for Advanced Transportation and Infrastructure and teaming with an economist will generate new perspectives across disciplines. The work effort will be complete in 12 months and this proposal is offered as the first phase that will result in a determination of the feasibility of the concept.

Project Abstract:

The purpose of this project is to investigate the relationship between truck movements and the economic performance of the New York/New Jersey region, and thereby, to test whether truck movements on the I-95 Corridor are a leading indicator of changes in the performance of the New York/New Jersey regional economy.

The economy is susceptible to fluctuations as economic conditions change over time. Economists, forecasters, and others use monthly economic measures to track the performance of the economy, to understand the short-term relationships among different sectors of the economy, and to forecast the performance of the economy, particularly business cycles. To do this they use measures called ?indicators?, such as employment, manufacturing production, sales, business inventories, and consumer confidence, among other things. In addition to giving information that is valuable in its own right, the indicators often have a relationship to the growth of the economy, measured by Gross Domestic Product (GDP) for the nation, or Gross State Product (GSP) for a state. Until now, freight movements were not included in these indicators. Preliminary work suggests that a freight indicator when used with other economic indicators could produce a better understanding of the current and future course of the economy. The movement of a freight index over time can be compared with other economic measures to understand the relationship of transportation to changes in the regional economy. Leading indicators are especially useful in forecasting turning points in the economy, and are therefore of particular interest to economic decision-makers.