Decomposing the impact of structural change on GDP and transport volume: Evidence from Mexico and USA

Abstract

Economic activity and its structure (i.e. tertiary, secondary and primary sectors) are strongly linked to the transport of goods and people. Transport is a central driver of energy consumption and generates negative externalities. The decoupling of transport demand from energy use and environmental pressure constitutes a challenge for sustainable development. This study proposes a mathematical identity for understanding the transport sector based on the application of the LMDI methodology. Firstly, based on this identity, the study examines the transport of goods, passengers, and the total transport volume. Secondly, it analyzes changes in economic activity and structure, and thirdly, changes in transport intensity, to determine which sectors drive or constrain transport activity. The results reveal that primary economic activity is the main driver of transport in Mexico, while in the USA, tertiary economic activity predominates. Specifically, the mining industry drives the transport of goods, and professional and technical services play a key role in passenger transport in both countries. However, transport intensity contributes to reducing the overall transport volume. The study concludes that the increase in transport volume at all levels will be driven by economic activity and supported by economic structure, significantly offsetting the reduction attributed to transport intensity.