Residents of dense, mixed-use, transit-accessible neighborhoods use autos less. Recent studies have suggested that this relationship is partly because transit-preferring and walk-preferring households seek and find such neighborhoods. If this is so, and if the number of such households is small, policies to alter the built environment may not influence auto use very much. I argue that many of these studies are inconclusive on methodological grounds, and that more research is needed. A purpose-designed survey of households in two urban regions in California is investigated, with the aid of a new methodological approach. I find that most surveyed households explicitly consider travel access of some kind when choosing a neighborhood, but that this process of residential self-selection does not bias estimates of the effects of the built environment very much. To the extent that it does exert an influence, the bias results both in underestimates and overestimates of the effects of the built environment, contrary to previous research. The analysis not only implies a need for deregulatory approaches to land-use and transportation planning, but also suggests that there may be value in market interventions such as subsidies and new prescriptive regulations.

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Public transport improvements may increase economic productivity if they enable the growth and densification of cities, downtowns, or industrial clusters and thereby increase external agglomeration economies. It has been argued that the potential agglomeration benefits are large; if so, understanding them better would be useful in making funding decisions about public transport improvements. We reviewed theoretical and empirical literature on agglomeration as well as a small number of articles on transportation's role in agglomeration. The theoretical literature is useful in understanding possible avenues by which transportation improvements might affect agglomeration, although there is little discussion of public transport specifically. Relevant empirical studies tend to focus on metropolitan regions and use a generalized measure of transportation cost. But public transport impacts on agglomeration are likely to be different from road investment impacts. We identified several ways of conducting research building on this literature that would help evaluate the agglomeration impacts of public transport proposals: tracing the links between transport, agglomeration, and productivity; better motivating research using theories of agglomeration mechanisms; taking scale and redistribution into account; exploring the functional form of agglomeration economies; accounting for endogeneity in model structure; and considering development context.

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