Isolating the effect of cycling on local business environments in London

Abstract

We investigate whether increasing cycling activity affects the emergence of new local businesses. Historical amenity data from OpenStreetMap is used to quantify change in shop and sustenance amenity counts. We apply an instrumental variable framework to investigate a causal relationship and to account for endogeneity in the model. Measures of cycling infrastructure serve as instruments. The impact is evaluated on the level of 4835 Lower Super Output Areas in Greater London. Our results indicate that an increase in cycling trips significantly contributes to the emergence of new local shops and businesses. Limitations regarding data quality, zero-inflation and residual spatial autocorrelation are discussed. While our findings correspond to previous investigations stating positive economic effects of cycling, we advance research in the field by providing a new dataset of unprecedented high granularity and size. Furthermore, this is the first study in cycling research looking at business amenities as a measure of economic activity. The insights from our analysis can enhance understandings of how cycling affects the development of local urban economies and may thus be used to assess and evaluate transport policies and investments. Beyond this, our study highlights the value of open data in city research.