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Driving Costs

by Elaine Schwartz    •    Jun 28, 2011    •    295 Views    •    TIME TO READ: 1 minute

Describing traffic policy in several European cities, the NY Times tells of poorly synchronized green lights, congestion pricing, auto-free zones. When drivers are inconvenienced, there are fewer cars, fewer emissions, happier pedestrians and bikers.

One question: How did cost compare to benefit?

The Economic Lesson

Referring to abuse of commonly owned resources, Nobel laureate Elinor Ostrom talked about a Swiss pasture. Animal owners endangered the entire pasture because it was communal.

Called the tragedy of the commons, when a resource is shared by many rather than privately owned, it tends to be “misused” or “overused.” For a pasture, “misuse” is over grazing; in the ocean, fish populations are depleted; on roads, there are too many drivers; and in student lounges, people avoid clean-up.

An Economic Question: Using the following facts, explain your cost/benefit analysis:

In Traffic, Tom Vanderbilt describes the impact of tolls in Seattle on drivers with electronic devices that recorded where and when they drove. Just hearing that the cost of a trip would change, drivers left earlier, switched routes, changed plans. Then, when the tolls were imposed, their behavior changed even more. (p. 166) Researchers said the result of the tolls was a 13% drop in traffic that restored normal driving speeds.

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