Thursday, April 25, 2013

Elon Musk Has a Very High Value of Time

Rich guy and transportation visionary Elon Musk wants to pay cash money to accelerate the widening of the 405 in Los Angeles. Here is a story in the LA Times about this. He has already paid $50,000 to the cause and is willing to spend more. How many hours does he expect to save and what is his value of time? Should rich people pay more for capital expenditures? My favorite part is that he jokes that it is easier and faster to launch a rocket than build a road:
Musk quips that it's easier getting rockets into orbit than navigating his commute between home in Bel-Air and his Space Exploration Technologies factory in Hawthorne.
But the joke is on us as it is also cheaper to go to Mars than add a few lane miles. The 405 project will now cost about $1.1 billion according to the LA Times story, or about 50% more than the Mars Rover project.

In any event, Elon Musk should spend bit on a transport planning and policy course and learn all about induced demand. His investment in roads is not money well spent.
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