Original post date: November 04, 2013
Article by: Ben Douglas

The careful application of economics to policy reveals a host of ironies. Minimum wages create unemployment among the very unskilled laborers policymakers intend to help. Rent control destroys housing in the very cities it is intended to save. Adam Smith’s entire concept of an “invisible hand,” by which self-interested buyers and sellers come together in the market to make mutually beneficial exchanges, is steeped in irony. These examples are well known to economists. A lesser known irony can be found in transit—a sector of the economy dominated by central planning.

Transit is often touted as the advanced, cost-effective, environmentally friendly way to do urban transportation. On the surface, this makes sense. If you take one commuter out of his car and put him on a bus that is going to be operating anyway, efficiency within the existing system goes up. More people on existing buses, ceteris paribus, increase the number of passengers per trip and therefore reduces BTUs (or energy used) per passenger mile. Transit, it would seem, is the environmentally friendly way to commute.

Not so fast, says Eric Morris, an urban planning professor writing for the Freakonomics blog. Frequently, studies on the energy efficiency of transit vs. private automobile travel assume a bus filled to capacity and one rider per car. In the real world, this assumption doesn’t hold water. The average car has about 1.6 riders, whereas the average bus has around 10. By the government’s very own statistics, transporting each passenger one mile takes more energy by bus than by car.  “It is not clear,” says Morris, “that moving around large and largely empty vehicles is much of an improvement over moving around smaller ones. In fact, it may be worse.” (See also this analysis by Randal O’Toole here.)

Morris recommends policymakers cease to expand transit, and instead seek to expand ridership on existing transit systems. The above figures alone show there is plenty of room for a few additional passengers per bus, and the marginal cost is almost nothing. Morris’ proposal for increasing ridership includes “pull” strategies designed to incentivize the use of public transport (e.g., fare cuts), and “push” strategies designed to disincentivize the use of private cars (e.g., taxes and fees for driving).

Unfortunately, these goals may be difficult to accomplish. As the satirical news organization The Onion pointed out, 98% of US commuters support public transportation for others. Transit thus seems to be a prisoner’s dilemma. Collectively, it is in our interest as commuters, taxpayers, and environmentalists to see more people in Greyhounds instead of Cadillacs. At the individual level, however, it is in our interest to drive privately. The marginal increase in pollution and traffic congestion from one car on the road is very small. Our private gain from the freedom private car usage provides, however, tends to be enormous. Perhaps this is why 76.6% of Americans and 83% of Floridians chose to commute alone in 2010.

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