There has been a lot of media attention in the last few years on the subject. I found an interesting poll conducted by ABC news that not only lists average commute time, but also distance.
Poll: Traffic in the United States
Analysis By GARY LANGER
Feb. 13, 2005
"Life for commuters can be heaven or hell. They report an average one-way commute time of 26 minutes (over an average distance of 16 miles). But the variance is huge: On the best days, the average commute is 19 minutes; on the worst days, 46 minutes. That means traffic, at its worst, can double the average commute time, adding 27 minutes each way."16 miles / 26 minutes = 36.92 mph
16 miles x 2 = 32 miles roundtrip
32 miles x 50 weeks x 5 days a week = 8,000 miles
If the average American drives 12,000 miles a year, this means 4,000 miles are non-work related.
According to the US Census, the average commuter in Los Angeles spends
29.0 minutes getting to work. Assuming they are commuting the same distance as in the ABC poll, LA commuters are driving much slower at 33 mph. This is no big surprise if you've ever been to LA.
Here's a story that defines what extreme commuting is in a few short sentences.
Think your commute is tough?
By Debbie Howlett and Paul Overberg, USA TODAY
Posted 11/29/2004 11:17 PM
"3.4 million Americans who endure a daily "extreme commute" of 90 minutes or more each way to work. They're among the fastest-growing segment of commuters, according to a Census study, Journey to Work, released in March. Their commute times are more than triple the national average of 25.5 minutes each way."How many people are doing this extreme commute? The Census Burea says "Nationally, just 2.0 percent of workers faced extreme commutes to their jobs." But in Los Angeles, that number is much higher at 3.0% (PDF warning). Note that these numbers date back to 2003. With the effects of the housing price boom, I would expect significant growth to those numbers.
Let's take those numbers of 90+ minutes and apply it to the average speed of 33 mph in the Los Angeles area.
33 mph x 1.5 hours = 49.5 miles
49.5 miles x 2 ways x 5 days x 50 weeks = 24,750 miles
Plus an additional 4,000 miles a year for non-work related driving = 28,750 miles.
The absolute cheapest Edmunds.com TCO per mile I could find also belongs to the cheapest car in America - the Chevy Aveo special edition. Over a span of 15,000 miles per year over 5 years in Los Angeles, it supposedly will cost $0.44 per mile. Here's how they came up with their numbers.
Price:
And the breakdown of different costs:
If this is for 15,000 miles per year, we need to modify these costs for our extreme commute of 28,750 miles per year.
Depreciation:
We'll assume that a Chevy Aveo with 143,750 miles will be worth zip. Total depreciation = $10,340 / 143,750 miles = $0.07193 per mile
Financing:
Total cost = $2,173 / 143,750 miles = $0.01512 per mile
Insurance:
Total cost = $9,774 / 143,750 miles = $0.06799 per mile
Taxes & Fees:
Total cost = $1,139 / 143,750 miles = $0.00792 per mile
Fuel:
Year one = $1,456 / 15,000 = 0.0971 per mile x 28,750 = $2,790.67
Year two = $1,500 / 15,000 = 0.1000 per mile x 28,750 = $2,875.00
Year three = $1,545 / 15,000 = 0.1030 per mile x 28,750 = $2,961.25
Year four = $1,591 / 15,000 = 0.1061 per mile x 28,750 = $3,049.42
Year five = $1,639 / 15,000 = 0.1093 per mile x 28,750 = $3,141.42
Five year total = $14,817.75 divided by 143,750 miles = 0.1031 per mile
Maintenance:
Edmunds says $4,462 for 75,000 miles = $0.05949 per mile
We'll assume that scales the same for the huge number of miles.
Repairs:
The Aveo has a 100,000 mile powertrain warranty. If you do minimal repairs, Edmunds says that you on need to spend $774 over 75,000 miles. We'll up that to $2,500 to cover the period after the warranty runs out - but we'll assume major parts like the transmission and engine don't die until the end of the five year period.
$2,500 / 143,750 miles = 0.01739 per mile
Summary:
Depreciation: 0.07193
Financing: 0.01512
Insurance: 0.06799
Taxes & Fees: 0.00792
Fuel: 0.10310
Maintenance: 0.05949
Repairs: 0.01739
Total Cost Per Mile: $0.34294
Cost Per Year: $9,797.80
Required salary using the 4-6-10-25-33 budget: $58,786.77
Normal Commute:
Cost Per Year: $5,280.00
Required salary using the 4-6-10-25-33 budget: $31,680.00
Required bump in salary: 85%
What would motivate someone to live so far away from work? Why not just move closer? Let's take a look at housing costs in two cities - Los Angeles, with lots of high paying jobs, and Palmdale, with cheap housing. I personally know of at least a few people that make this commute daily.
Average house price in Palmdale, CA (2005): $303,800
Average house price in Los Angeles, CA: $513,800
Difference: $210,000
So using this data, I'm going to plug it into this very good rent vs buy calculator which seems to take almost everything in housing costs into account. Note that I'm not using the rent feature, as that complicates things significantly. I got the following assumptions for these calculations from the Freddie Mac Weekly Prime market for 8/9/07
Rate: 6.59%
Fees/Points: 0.4
The following information came with the calculator, and it looks to me to be a good wild guess at what they will cost.
Loan origination: 1.000%
Other costs: $800
Property tax rate: 1.00%
Home Insurance: 0.50%
I used a down payment of $65,022 based on 20% of the cost of the house in Palmdale plus fees and closing costs. The calculator gives two results. Total, which includes all cash flowing out, and net, which includes the tax benefits of writing off interest/property taxes.
House Payment (total/net)
Palmdale: $1,930 / $1,536
Los Angeles: $3,741 / $3,015
Using the 4-6-10-25-33 budget and the net amounts:
Palmdale: $1536 x 4 = 6,144 a month x 12 = $73,728
Los Angeles: $3015 x 4 = 12,060 a month x 12 = $144,720
So you require a far lower income to live in Palmdale. But then, there are less jobs and less money in Palmdale. So if you live there and commute to Los Angeles, do you end up ahead?
Cost of the commute: $4,517.80 per year / 12 = 376.48 more a month.
Palmdale net: $1536 + 376.48 = $1,912.48 - $3,015 = $1,102.52 ahead per month
That advantage shrinks over time thanks to inflation. But so does the tax benefit of the larger interest payment on the house in Los Angeles.
If you work 9-5, that's 8 hours a day. Add 29 minutes to each end, and you have a 9 hour work day. Extreme commuting of 90 minutes x 2 adds another two hours to that, for an 11 hour work day. 8 hours of sleep plus another 1/2 hour to get up and get ready/eat = 19.5 hours. That leaves you with 4.5 hours a day to do other things. Not so bad, eh?
Of course, how many Americans really work a 9-5? With a half hour for lunch, that's only 37.5 hours a week. According to the Bureau of Labor Statistics, in 2006 the average full time employed American worked 42.9 hours a week. Almost 10% of the people worked more than 60 hours a week and another 13.7% worked more than 49 hours.
42.9 hours a week = 8.6 hours a day + 0.5 for lunch = 9.1 hours a day
9.1 hours a day + 3 hours commute + 8 hours sleeping + 0.5 hours getting ready = 20.6 hours = 3.4 hours a day to do other things.
Now say you get in a traffic jam and it takes you an extra 1/2 hour each way. Now you only have 2 hours a day of free time. You can see pretty clearly that if you work extra hours or hit heavy traffic or drive more than 90 minutes, your free time can be quickly reduced to ZERO. Then you have to start cutting into other activities like sleeping in order to do other required activities like eating dinner, going to the grocery store, etc.
I don't think it makes sense to commute much further than a half hour. If you can't afford to live within that distance, then you probably should move elsewhere, rent or find another job. Business Week had a similar conclusion.
"This is what economists call "the commuting paradox." Most people travel long distances with the idea that they'll accept the burden for something better, be it a house, salary, or school. They presume the trade-off is worth the agony. But studies show that commuters are on average much less satisfied with their lives than noncommuters. A commuter who travels one hour, one way, would have to make 40% more than his current salary to be as fully satisfied with his life as a noncommuter, say economists Bruno S. Frey and Alois Stutzer of the University of Zurich's Institute for Empirical Research in Economics. People usually overestimate the value of the things they'll obtain by commuting -- more money, more material goods, more prestige -- and underestimate the benefit of what they are losing: social connections, hobbies, and health. "Commuting is a stress that doesn't pay off," says Stutzer."
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