Traffic congestion is a classic negative externality. As Becker explains, a driver does not consider the effect of his driving on the other users of the road, but only on himself. The standard method of reducing congestion--building more roads--is not only very costly but to a degree self-defeating, since by reducing congestion (and thus the time cost of driving) it attracts more traffic.
Despite much road building, congestion measured by average commuting delays has increased substantially in recent years. Becker makes the important point that the average per-hour private cost of commuting by car has fallen with the substantial improvements in automobile comfort. But it probably has not fallen enough to fully offset the increased delay.
The usual recommendation by economists for dealing with negative externalities is to tax the activity that produces them. The London solution described by Becker‚Äîa fee for driving into central London during weekdays‚Äîis a step in that direction, with impressive results, such as a 20 percent reduction in London vehicle traffic. But it is doubtful that this success can be duplicated in the United States. Before the imposition of the London commuting fee, 85 percent of the commuters were already using buses and other forms of public transportation rather than commuting by car. This indicated both that most commuters thought such transportation a good alternative to driving (though of course the 15 percent might not) and, more important, that the public transportation system could easily absorb additional commuters. A 20 percent decline in commuting by car translates into only a 3 percent shift to public transportation if commuters by car are only 15 percent of the total number of commuters before the fee is imposed. True, there are other methods of economizing on driving besides switching to another mode of transportation, such as car pooling, but car pooling has the features that people who dislike public transportation dislike: less privacy and flexibility than driving by oneself.
I believe that among major U.S. cities, only New York has comparable figures--some 80 percent of commuters to downtown Manhattan get there by means of public transportation, mainly subway, rather than by car. All cars entering Manhattan pay heavy bridge or tunnel tolls, however, so there would doubtless be stiff resistance to the imposition of a commuting fee. Mayor Bloomberg considered such an imposition but has backed off.
Resistance to a commuting fee would be much greater in cities that do not have good public transportation alternatives. The reason is that in such cities, heavy commuting fees would reduce the number of commuters, hurting downtown businesses. On average, only about 2 percent of American commuters use public transportation.
Notice also that by reducing congestion and hence the cost of commuting by car, a stiff commuting fee may have only a modest effect on congestion. Indeed, the fee will induce some commuters to substitute driving, if they have a high cost of time, for public transportation.
The political obstacles to commuting fees have persuaded the traffic economist Richard Arnott that more attention should be paid to substitute methods of reducing traffic congestion. A good deal of congestion is due to commuters hunting for parking places and to trucks blocking streets while unloading, as well as to bad driving (for example leading to more accidents), increased vehicle size (e.g., SUVs), poor road surfaces, road repairs, poor road design, weather, and bottlenecks. The problem is that any measure that reduces congestion without imposing any additional cost on the commuter will, as I mentioned, tend to increase the amount of traffic as commuters and other drivers switch from public transportation to cars or make less effort to avoid rush-hour traffic.
A frequent suggestion for combating traffic congestion is staggered work hours. A favorite suggestion of economists that would have a similar effect would be to make the commuting fee vary by time of day, so that it would be higher during rush hours. But these suggestions involve a hidden cost: by reducing the overlap of working hours, they reduce one of the principal economies of urban business districts--the dense network of face-to-face interactions that such districts enable.
I conclude that until traffic congestion gets significantly worse, little will be done, and perhaps little should be done, to try to reduce it. But I am not pessimistic. In the long run what will reduce traffic congestion will be the continued digital revolution, which will not only increase the amount of telecommuting but also lead to a substantial substitution of virtual for face-to-face interactions in business, shopping, and even socializing. The business district of the future and the mall of the future may be located in cyberspace.
The digital revolution has altered my own commuting. With high-speed internet access I work at home much more than I did when I started as a judge 24 years ago, and rarely have occasion to drive during rush hour.