Traffic Congestion--Posner's Comment

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—a fee for driving into central London during weekdays—is 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.

Comments

[robert]

Posner's comments about the digital revolution having an increased (and increasing) impact on traffic congestion is exactly correct. Likewise with the growth of "exurbs", i.e., if we can't stop the public from driving to the city center, then let's bring the city center to the public. In this way traffic congestion is the impetus for the growth of exurban America.

[David]

Predictably, Posner does not propose upgrading our public transportation infrastructure or encouraging carpooling -- two solutions that could greatly reduce traffic congestion in the long term. Encouraging the use of public transportation or shared rides would have the added benefit of reducing our use of gasoline, which has become not only an environmental concern but also a national security concern. Of course, these sensible solutions would require government involvement, which is why I suppose that Posner does not propose them.

[James]

David - I don't see how Posner's solution (congestion tax) is less intrusive than yours (mass transit subsidization).

Also, here's something I haven't quite worked out. I've read that mass transit is actually much more efficient at moving large numbers of people than cars. If that's true, then channeling people into mass transit might actually increase the foot traffic in downtown areas, yes? Which should be good for retailers. Also, instead of businesses moving out, people might move in, which could help many downtowns. Of course this isn't guaranteed, but isn't it at least a possibility?

[GMUSL 2L]

At least here in the greater DC area, I think that there is a pretty good and simple explanation for the bulk of the traffic (and it's the same thing that creates urban sprawl).

While Arlington County's initial refusal to have an east-west interstate at all, followed by its grudging acceptance of a mere two lanes in each direction, certainly has an effect, alleviating that restriction also has a countervailing Say's law problem -- if the highways were wider and less congested, more people would drive.

The real reason, at least in this area, is the same thing that differentiates DC from New York and Boston -- the height restriction on buildings. While buildings in NYC often have 80 stories, no building in DC can be over 14 stories or so because none can be higher than the Washington monument, no matter how far away in the city (or even in Anacostia) they are. This results in a much lower density of both office and residential space in the District of Columbia, which ends up pushing potential residents and potential offices out of DC. This low density also keeps the bipolar DC metro in its current state, rather than having commuter rails in multiple directions like New York (NJ Transit to the West/South, LIRR to the east, and Metronorth to the north, as well as Amtrak to the North and South to a limited extent). While there is some limited commuter rail in DC, it is negligible even compared to that in Boston. The DC Metro system, extending out to Rockville and Vienna, tries to serve both purposes.

While I don't know what a good solution would be to this problem at the moment (as I'm sure that many building owners would demolish and rebuild much higher), I do have a pretty good sense what the problem is.

[GMUSL 2L]

I probably didn't make it clear enough, but the DC Metro is essentially serving as both (a) a local commuter rail; and (b) a city subway system.

[Arun Khanna]

"I conclude that until traffic congestion gets significantly worse, little will be done, and perhaps little should be done, to try to reduce it."

In the interim, perhaps a system that provides real-time updates about clogged traffic and suggested alternative routes on digital stop signs would help.

[David]

James - Posner ultimately rejects the idea of a congestion tax, for the obvious reason that taxing traffic will not do any good if you don't provide commuters with an alternative to driving. Thus, for cities without good public transportation networks, a congestion tax is not a solution. Investment in mass transit and shared rides programs are the obvious alternative.

[Peter]

The discussion skips over the amazing growth of non-work trips -- especially during peak hours. In the years 1990-2001 (the years of the large FHWA surveys), worktrips increased by 23% but non-work trips grew by 30%.

It is all about income. More money, more cars, more errands via autos on highways. (Some may remember the now extinct "family car".) In 2001, more than 55% of all 6am-9am trips were non-work; more than 62% of 4pm-7pm trips were non-work. (If vehicle-miles are used, it is slightly less skewed because work-trips are longer.) All of this strengthens the case for peak-load pricing. Many of those "discretionary" trips might be re-thought or re-scheduled.

[James Wetterau]

The claim that "On average, only about 2 percent of American commuters use public transportation," seems unbelievable to me. I have done a little figuring and research and it looks wrong by a factor of two or three.

The population of New York City ia about 3 percent of the U.S. total population. The greater NYC metropolitan area is approximately 7 percent of the US population. A very large fraction of the commuters in NYC and a substantial fraction of the commuters in the area use public transportation daily. I would expect that they would alone be enough to account for the 2 percent figure. Surely the rest of the country uses some public transportation.

The MTA (NYC area mass transit authority) website claims that they carry about 1/3 of the public transit commuters in the country. So my back-of-the-envelope calculations lead me to expect somewhat more like 6% of he US commuters daily or mainly use public tranportation.

The MTA claims to carry almost 8 million weekday passengers. Even if they count round-trip commuters twice, I would expect this amounts to perhaps 3 million commuters and a couple of million other passengers, such as students and tourists. This estimate again roughly matches 2 percent of the U.S. workforce.

http://www.mta.nyc.ny.us/mta/network.htm

If the MTA's claims are correct, approximately 6 percent of the US commuters would be using public transportation -- three times the number Posner gave.

http://www.honolulutraffic.com/myth3.htm

A Hawaiian group opposed to building more public transportation in Oahu claims the US census figures for 2000 (I am unable to quickly find the original figures) show that about 87.9 of workers drove, 4.7% used public transportation, 2.9% walked, 1.2% used other means, and 3.3% worked at home.

If we agree that walking to work or working at home is not a "commute" of the type we are concerned with here, and if we lump the 1.2% in with the drivers as using private transportation, we have 4.7% of workers using public ransportation and 90.1% commuting via private means. This means that of the approximately 95% of workers who have some kind of vehicular commute, whether by car, motorcycle, private boat or any other means, about 5% used public transportation. Again, this roughly squares with my estimate, though it is a bit lower.

Is it possible that the 2% number refers to the fraction of the total U.S. population that commutes via public transporation, rather than the fraction of commuters who use public vs. private transportation?

[Chris]

Posner hits the nail on the head with regards to a lack of available public transportation for a lot of people. This is especially true for those of us living in the Motor State where even carpool lanes are unheard of.

Rather than making the congestion tax "revenue neutral", I wonder if a good idea might be to institute a congestion tax with the proceeds used to finance construction of mass transit in these cities. Sure, the time to build would be long, but in the interim, it would encourage more people to carpool and cut down on frivolous trips during peak driving times. Of course, we'd have to make sure that politicians would use the tax receipts to fund mass transportation and not just put them in the general fund to be spent however they see fit.

[Lars]

The day the London congestion charge was introduced, I went to work on my bicycle on almost empty roads. Since then, cars have flooded back onto the streets, levelling off at about 80% of the pre-charge peak (as mentioned in the post).
20% fewer cars on the streets means that traffic is flowing significantly faster. The outlook to an easy commute by car made me consider switching from public transport to car on rainy days; the GBP 5 charge was comparable to paying GBP 4 for a return ticket on the tube. That is, until I learned that parking would cost around GBP 16 per day.
(Since then, the London congestion charge has increased to GBP 8 per day.)

[N.E.Hatfield]

Traffic congestion is but a symptom of a failed urban and regional development program. Does any one remember the old Interurban rail systems that existed coast to coast and just about linked every town and hamlet in the U.S.? Not too mention the small urban rail systems that existed in almost every town and city of America. What ever happend to them? Check with the Oil Companies and the Auto Manufacturers and the public's desire for an automobile..

Another issue regarding traffic congestion lies in the fact of a lack of investment in infrastructure, i.e. roads and bridges. Now too expensive to build and in some cases maintain.

What's to be done, how about horses and mules!

[ben]

for cities without good public transportation networks, a congestion tax is not a solution. Investment in mass transit and shared rides programs are the obvious alternative.

The lack of alternative transport options also bolsters the case for more roads to be built, because there will be relatively less substitution from other transport and therefore less additional traffic caused by new roads (Say's Law).

[Paul Eberhardt]

Interesting topic. Regarding the limited availability of public transit in the US, perhaps the problem is mostly transitional, and could be addressed by introduction of relatively modest congestion fees, which would be increased over time. If the initial fees caused a dramatic increase in the demand for public transit, then increases could be stretched out to allow the public transit authorities to catch up to the increased demand. Similarly, we could expect congestion fees to cause at least *some* changes in land use, which would be hard to predict in advance.

The problem of political opposition to congestion fees may make them impractical for the largest US cities, for now. However, there are many middle-sized US cities which have relatively severe congestion problems, are looking for new revenue sources, have fairly adequate central city commuter transit systems, and are very politically liberal. Examples which I know of include San Fransisco and my own hometown of Portland, Oregon. If these systems prove useful in smaller cities, this would give other cities a reason to adopt them.

My own political opinions, much informed by Judge Posner's work, are that employment and payroll taxes are one of the worst possible types of modern taxes. This is confirmed by my work as a small business lawyer, where I see many people tempted to avoid employment taxes by adopting independent contractor relationships, rather than taking on casual employees, which causes all kinds of other distortions, misunderstandings and transactional inefficiency. To the extent that congestion fees can be substituted for municipal payroll taxes, my sense is that there would be a net gain for most businesses in most cities, even if the result were some increase in the total amount of taxes paid.

In the same vein, though fuel taxes do not specifically target high-congestion periods of road use, they would have the overall effect of reducing traffic, as well as decreasing other negative externalities of fuel use, like pollution, global warming, and some increased defense costs. Again, to the extent these can substitute for payroll taxes (which burden activity which has, on net, positive externalities), the overall result would have to be good.

A method for making this revenue politically unavailable for spending would be to "re-distribute" it as a credit against Social Security taxes. If the result were that gasoline cost an extra $2.00 per gallon, but the first $12,000 in earned income were free of Social Security tax (and these two facts were explicitly tied together), most people would probably find it a good deal.

[Jimmy]

Walking should be encouraged. This would both reduce traffic congestion and improve health. Between the internet and the automobile, we are sitting around way too much, getting weak and/or fat, getting cabin fever, losing the daily experiences we ought to be having with the great outdoors. You can even do great mental work while on foot. They say Wallace Stevens composed a lot of his poetry while on foot between home and office.

At least part of the commute should be a walk, to and from the train stations that ought to be built out to the higher-density sidewalk-equipped neighborhoods that ought to be built, emulating the older suburbs that were built around the train stops before everyone had cars.

[Joe Merchant]

Jimmy, nice thought about walking - unfortunately, even the best poetry seldom pays the mortgage.

Also, another good point about our cities being constructed poorly for anything other than automobile transportation - this is a not-very-well hidden cost of the automobile, and if we are to wean ourselves away from automobile style transportation, it will cost trillions in infrastructure rebuilding in the US to relocate residences and commercial centers into arrangements that work without individual high-speed weather resistant transport. Bus and rail will not really integrate with modern suburban sprawl in any efficient fashion.

I prefer Becker's end-game of telecommuting, in effect my family does most of our non-food shopping this way already, and if the people at work didn't require face to face persuasion so often, I could really perform job from home also. With the time saved in travel to-from work and shopping, and home delivery of groceries (which was nice while I had it in South Florida - unfortunately Publix Markets discontinued the service as "not presently economically viable), there would be plenty of time to walk in the woods.... if we choose to do so.

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