Our Transportation Infrastructure is Crumbling

HOT or Not?

Feb 27, 2012 • Behavioral Economics, Demand, Supply, and Markets, Economic Debates, Environment, Government, Households, Innovation, Macroeconomic Measurement, Regulation, The Pulse, Thinking Economically, Uncategorized • 236 Views    No Comments

Stuck in traffic, alone in the car, and you’ve got to get to work soon. Will you pay to move into the High Occupancy Toll (HOT) lane?

Here is how it works: Traditionally reserved for High Occupancy Vehicles, the HOV lane has been the exclusive territory of vehicles with 3 or more people, buses, certain fuel efficient vehicles and motorcycles. Now, close to Atlanta and in other participating areas, a commuter with a transponder on his or her car to record HOT lane mileage can also move into the express lane.

How much does it cost? It depends on the congestion. The worse the traffic the higher the price. It could be a penny a mile or as high as 99 cents. However, when Atlanta charged $5.05 for traveling in the HOT lane during peak travel time, so few motorists chose it and so many objected that the governor lowered the price to $3.05.

Still though people are objecting but for a different reason. Reserving a HOT/HOV lane means more cars elsewhere. One driver said that his commuting time doubled when the lane became available. Some traffic experts believe, though, that when managed appropriately, congestion can be diminished by a special use lane while others do not.

The Economic Lesson

Called the tragedy of the commons, when a resource such as public roads is owned by the community rather than privately, it tends to be overused and abused. Some say the solution is making roads more costly. Others point out that the solution is regressive because those who have the least would pay, proportionally, the most. Pointing to the regressive character of HOT lanes, opponents have called them Lexus Lanes.

An Economic Question: How might you illustrate HOT pricing on a demand and supply graph?

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