Voting with your feet, or maybe your whole town

Apparently Saint Bonifacius, in Hennepin County in Minnesota, wants to leave the county and switch its allegiance to the neighboring county of Carver. In particular, the town does not like it's tax dollars going to Minneapolis projects or transit investment. St. Bonifacius doesn't feel like their taxes benefit them. They are probably right, and this raises questions of how to pay for public services. I don't think that the fringes do benefit from transit investment since they are not connected to the transit network, and if they are connected they only have a couple of links as access points.

But this seems like their solution is to gerrymand their way to lower taxes. Maybe we can avoid these problems if we focus more on use taxes and have clearer property rights over public services (i.e., the fringes do not have expectations of paying for transit until they are part of the system).

Conversely, the town can be compensated some other that satisfies their needs, such as faster snow plows and fire service. Ultimately, municipal boundaries rarely fit neatly with desired services. This is a major issue that needs much more research.

London congestion charge did not improve air quality

According to recent research, the London congestion charge did not improve air quality. Improved air quality was expected and previous studies found evidence supporting this claim. What this latest study does is highlight the complexity of transportation planning as quality of life issues are fighting with economic issues within the field. I suspect that mitigating congestion and environmental improvements are natural allies regardless of the results of this study.
I'm not sure why the air quality did not improve, but I would start looking for answers by examining the increase in the number of buses within the cordon. Perhaps an increase in transit use will have detrimental impacts on air quality. If so, that needs to be fixed, but it's not surprising.

People know that suspending the gas tax is dumb

For all the talk of suspending the gas tax, the part that really bugs me is the analysis that this is smart politics by Clinton and McCain. I disagree. I think this is lousy politics because people aren't dumb enough to think that a gas tax holiday will solve anything. The problem is not that gas is about $.20 too high per gallon, it's that people are required to use so much of it. Granted, a lot of the moaning about the price of gas is because people bought inefficient cars to begin with, but I suspect that everybody knows that a holiday will not make a difference, and will probably hurt in the long run because of lowered revenues for investment in the transportation system.

As for McCain specifically, his proposal signals a bizarre hostility to any and all earmarks. By eliminating the gas tax, he is effectively saying he doesn't like not only earmarks on spending, but earmarks on revenue. He wants all taxes to be contributed to the general fund, I guess. The gas tax and Highway Trust Fund, while problematic for a variety of reasons, are pretty good public policy and shouldn't be broken. For it they are broken, they are unlikely to be fixed. Until we start paying for the roads and space we use directly, they are the best we have.

The effect of gas prices on small business

This story tells that tale of some small business owners who have to raise their prices or institute a mileage fee to their clients. There are a couple of things about these stories that bother me. First, while high gas prices certainly put pressure on family and business budgets, these stories seem to suggest that gas prices have gone from almost free to some exorbitant price. But it's not as if gas was a nickel recently. Prices have increased 20-30%, but as the woman in the story notes, she was already paying $75 per week. Now she pays $90. That's not a huge increase.

The second thing that bugs me is that while the demand for gasoline is inelastic, so is price sensitivity. People have been buying SUVs and large-engined cars for a long time. Where was the price sensitivity then? The woman in the story is driving a Ford Explorer to chauffeur around a dachshund! That dog could be moved around on a bicycle. Smaller cars that are more fuel efficient have been available but no one bought them, even though American companies' SUVs routinely were rated as poor quality vehicles. So people don't care about mileage or quality.

What does this tell us about the effect of gas prices? Not much, but we know that we have to keep looking for answers.

External airbags for better cycling

The Dutch (well, some of them) want external airbags on cars to protect bicyclists. From a cost benefit perspective, I think this is probably too expensive a fix since a lot of people buy cars and drive where there aren't many (if any) cyclists. I worry about moral hazard here, too, since the costs of injury are borne exclusively by the cyclist and not the driver. (Not to mention the notion that even wearing a helmet potentially makes a cyclist more likely to get hit because it alters driver behavior.) Would drivers be more likely to drive aggressively around bikes if they weren't worried about killing someone? Judging by the general attitudes of drivers towards cyclists as it is, I don't want to chance it.

Do conservatives understand Coase?

First the Conservapedia description of Coase is way off base, then Megan McArdle gets it wrong and uses "preference maximization" as a synonym for utility maximization.
Like any theoretical economic lens, Coase provides a way to look at allocations of resources through a simplified model. We learn a lot by discovering where the real world differs from the model, and the model helps us understand what we are supposed to be looking for.

The example MEgan McArdle gives in her post is actually the textbook example of the Coase Theorem, so it's pretty easy to show the problem with her description. McArdle seems to suggest that transaction costs are minimized because the homes are next to each other. Geographic proximity does not enter into the calculation of transaction costs, however. What McArdle misses with her claim of preference maximization is the initial distribution of property rights. It is clearly defined rights that will limit transaction costs and facilitate bargaining. In this case, the right to play music loudly and the right to peace and quiet are poorly defined. This prevents an efficient bargain. If the initial rights were clear, then the two parties could bargain to the point that either the neighbor who likes quiet pays the other to not play his music as loudly as he has rights to, or vise versa. At some point both parties will be satisfied and the outcome will be efficient.

Of course, the issue with using Coase is that is nearly all situations the initial rights are not clear, wealth effects skew bargaining positions and transaction costs are present. So in this case we would use Coase to explore what rights and costs exist that prevent an efficient solution.

China has that new car smell

This story from the NY Times notes that most cars in China are sold to first time car buyers. Not only that, but the buyers are interested in cars as social status. The anecdote at the beginning of the story about the father thinking the car was good luck sounds like it was pulled straight from the history of the car in the US. In his new book, Tom McCarthy recounts stories about Detroit's response to the car as a social icon and how the Model T couldn't survive once cars were no longer simply utilitarian.

But more importantly, no one should be surprised that China is reorganizing socially around the mobility afforded by autos. It happened everywhere else cars are dominant, and there is no other available technology that offers so much utility as the auto. It's too bad China is making the same environmental mistakes that the West made, because the rapid urbanization in China is going to be hard to fix once built and the population density will suffer from polluted air and lunatic streets. But at least the sons of proud patriarchs will be able to take the family car and find a bride.

Should public policy push or pull technology?

All predictions are wrong, some are just more wrong than others. (ht dml) Since this is the case, what is the role of public policy in moving technology forward. This is an extremely important question right now as many people (such as the President) are waiting around for technology to solve our energy, pollution and climate change problems. See the President's recent energy speech for an example of technologist thinking.

I was thinking about this issue when I read Kevin Kelly's list of things he's been terribly wrong about. He writes about technology for a living, and missed the appeal of Photoshop and the Sims, plus he overestimated the importance of Second Life (as did a lot of people. I wonder how John Edwards' Second Life campaign headquarters is doing now.).

Specifically to public policy, new technologies are extremely important for the transportation sector, but who should lead the way on development and implementation? The new CAFE standards issued this week will likely push new engine technologies and ultimately produce cleaner and more efficient cars. Automakers react differently to CAFE standards, however. This paper argues that American car companies do just enough to meet the standards while Japanese car makers already exceed them and European companies only import cars luxury cars and they incorporate the fines for not meeting CAFE numbers into the price of their cars.

The new CAFE standards are certainly one step forward and at least two steps back as California will lose it's ability to regulate to a higher standard than federally mandated. California has a long history of regulating emissions above and beyond federal standards, but the new CAFE prohibits this from continuing. In this case, the likely outcome of the overall policy is to limit the development of new technologies that improve fuel economy as the increase in CAFE is not great enough to require complete re-engineering of engine technology, and existing technologies that are deployed elsewhere in the world are less likely to find a market in the U.S. For instance, there are many Japanese and European cars that are far more environmentally friendly in propulsion and overall size than are available in this country. If California is able to regulate it's own environmental standards, the companies that build these cars could conceivably introduce them to the large and important California market. This would open the door for a national roll out at some point in the future.

Ultimately, as the development of the web taught us, predicting the future of technology is a risky game. Often technologies are used in ways that they were not designed for initially, but they prove very useful anyway. Certainly waiting around for technology to save us is foolish, and those thoughts are only popular because technologies that are not yet invented do not yet cost anything. Our experience with existing technologies suggests that how we pay for future improvements is far more important as an issue than what those improvements are. I guess that's where public policy should focus, and at times force people to pay for something new. At the same time, policy needs to allow for innovations that would occur in the absence of public intervention (such as more efficient cars from abroad).

Inelastic demand for gasoline or driving?

This story from the LA Times quotes a couple of people who seem surprised that there is less outrage about the price of gas than they might expect. The lack of outrage doesn't seem so surprising when you account for the elasticity of demand for gas. As an automobile dominated society, people have little recourse when the price of gas goes up except to pay the higher cost. I suspect that most people realize that they made some choices about what they drive and where they drive that have put them in the bind of forking over a lot of money to fill up the tank. I do wonder just how price sensitive people are, and how price sensitive they are expected to be, considering that high fuel economy cars have never been popular. It's not like fuel efficient cars are hard to get. They are often cheaper to buy, certainly cheaper to own and maintain, and quite well equipped.

The Toyota Prius is an obvious example of high demand for a fuel efficient car, but there are many confounding factors to understanding it's popularity. First, there was the ridiculous HOV exemption in California. Second, and probably most important, Prius' look unique. This allows people to show their greenness to the world. The Honda Civic hybrid has never been as popular as the Prius, and I suspect the reason is strangers don't know you're saving the world without looking carefully. I also suspect that Honda inadvertently set the stage for hybrid's to look weird with their unpopular early effort. The failure of the Insight probably led the company to think that refitting their existing models was the way to go, while Toyota thought they were competing with the Insight, so they made it look strange.

Perhaps the electric Think City will become the next big thing if the demand for driving remains in elastic.

Give the people what they want

So Oklahoma City is apparently known for more than football, graciously hosting the displaced New Orleans Hornets and not so graciously getting the Seattle Supersonics. They have a river! The river was rebuilt after decades of Army Corp directed dryness. Not so amazingly, it's a popular place for people to go. More interestingly is that OKC is now a hot bed of collegiate rowing.

City planners never would have guessed that rowing would be the big draw, and everyone would have laughed off anyone who suggested that OKC should even focus on rowing. I'm glad that the city was able to let people figure out how to use their new amenity on their own. No doubt the investment is far better because the use of the river was not determined before it was fixed. Hopefully if the LA River is ever redeveloped the city leaders will follow this example and let Angelenos how to use it.

The transportation land use connection-now with a mortgage crisis angle

Today's NPR story about home prices dropping everywhere except near transit lines seems to argue that availability of transit options is maintaining home prices in many areas. This may be true to a point, but I think an equally relevant question is whether "driving until you qualify" simply got a lot of people into homes that they couldn't afford. It's one thing to drive until you qualify for a mortgage that fits your budget, but quite another to drive until you qualify for one with crazy terms. In addition, many of the new construction homes were bid up by small time (and short term) investors, not actual long term homeowners.

I certainly see the advantage of living near transportation options, and I expect that as prices decline more attractive areas (because of amenities or transport choices) will hold their value better. But I don't think the availability of transit is enough to stop the overall price declines.

The right to mobility

To transportation planners, mobility and accessibility are precise terms that mean different things. Mobility is the ability to travel, and accessibility includes the cost of travel. While these two concepts share many characteristics, increases in mobility do not necessarily lead to increases in accessibility. One major question for public policy is what level of mobility and accessibility should people be guaranteed.

In Coy, Alabama, this is a major concern. In today's LA Times an article provides some details about how the price of gas is affecting the residents. Since people live in a rural town, they are auto dependent for their mobility. Since they are also poor, they have a hard time with the high price of gas.

This is an extreme example of isolation, but if that town is to survive, some level of mobility (and access) needs to be maintained. We can't let people become splintered away from society because they can't afford the very modest costs of local travel. However, if small town residents were given lifeline fuel credits, for instance, an incentive for other people who can afford to travel to move to the town is created. That's bad, too.

This is a difficult question, but the larger issue of rights to mobility and access will be a major concern for public policy in the near future.

This is not the way to change commuting behavior

This is a lousy situation. I don't think that threatened beheadings in Kenya will affect transit ridership elsewhere, but just imagine if something like this happened in the U.S., Europe or Asia. In South Los Angeles, the Blue Line is already something of a death trap (intentionally at times, it seems), but I can't imagine gangs putting a halt to ridership through threats. In Kenya, many people have lost their mobility and are suffering economic hardship because of these threats. What should the Government of Nairobi or Kenya do to ensure a minimum level of mobility for it's citizens? What can it do short of meeting the demands of the group making the threats?

Of course, in Japan you could imagine that someone who rides this train daily might make anonymous threats to get a bit more space on the cars.

Making hybrids noisy

There is proposed legislation that will require hybrids to alert themselves to the blind. This is certainly a good thing for those who need to hear their environment in order to get around. Unfortunately, this measure may add to noise pollution and diminish the noise benefits of the cars. Since hybrids (and PEVs and other non-internal combustion engine cars) both reduce the noise of traffic and the localized air pollution from driving, an increase in the number of hybrids can greatly improve the sidewalk quality of life in busy commercial areas. Of course, if cars start beeping when approaching intersections, this potential quality of life will be diminished. The quality of life for those who don't get hit by a car will remain quite high, however.

Local transportation policy, congestion and climate change

State lawmakers in California are considering a bill that would raise the gas tax and/or raise the vehicle registration fees to mitigate the transportation causes of climate change. The revenue raised in Los Angeles County will go to "mass transit improvements and programs to relieve congestion." This reflects the increasingly local nature of transportation funding as the state and federal governments have less and less money to give to transportation projects. As transportation is a shifting to a quality of life issue as well as a mobility concern, local governments need to find money to pay for improvements.

This is not a U.S. phenomenon. In London, where a congestion charge is levied to enter the center city, the Mayor is planning on implementing a $50 per day charge on large vehicles to mitigate emissions and local air pollution. If this charge wasn't enough of an incentive to switch to a smaller vehicle, the small cars will also be exempt from the daily cordon toll.

Ultimately, such a patchwork of policies can be beneficial, but cities need to be aware of the competing interests and goals of their policies. Taxing large cars is a good idea, but a vehicle fee based on weight is probably a better approach than one that claims global environmental benefits. Also, congestion and environmental concerns share many potential solutions, but the costs and benefits cannot be traded between environmental policy and traffic management. Environmental incentives should not include any benefits for driving more, such as exempting small cars from the tolls or carpool rules (as is the case in California).

This isn't to say that these ideas are any worse than what might be proposed at the national or international scale. It is good that cities are taking the lead in traffic and environmental policy. Many cities trying many things will result in a choice of public approaches that will be more flexible than a string hierarchical mandate. Yet too often public officials try to solve every problem with one magic policy. Congestion is one issue, green transportation is another. There will be policy overlaps regardless of the policy scope, but both the California legislation (through new road construction to reduce congestion) and London's emission fees (by exempting small cars from the congestion fee) will have the perverse effect of increasing auto dependence and congestion. It's as though lessons learned are lessons forgotten.