Our Transportation Infrastructure is Crumbling

Lowering the Cost of Commuting

Jun 14, 2012 • Behavioral Economics, Demand, Supply, and Markets, Economic Debates, Innovation, Labor, Regulation, Thinking Economically, Uncategorized • 113 Views    No Comments

Which alternative would you select to lessen rush hour traffic on NYC’s 5th Avenue?

  • Charging $10 for each block
  • Having the chance to win a $10,000 lottery prize if you take the bus


A Stanford professor is encouraging cities like Singapore to use the lottery alternative to shape our commuting behavior.

Trying to shift rush hour mass transit use to off peak times, Singapore is experimenting with discounts or the chance to win a lottery for people who switch. Now in its 6th month, the program has reduced peak ridership by 10% with the lottery alternative by far the first choice.

Still though, the response to positive incentives has been mixed. Citing the congestion pricing program proposed by Mayor Bloomberg and rejected by the NYS legislature, proponents of a more positive approach say it has more of a chance of being implemented. On the other hand, one opponent said that “little carrots” such as the chance to win a lottery are insufficient in a big city. A second expert warned that we should carefully choose our targets because incentive programs can have unintended consequences.

Where does this leave us? For commuters, rush hour takes more time and perhaps more energy. For municipalities, rush hour requires extra buses, trains and people that are underutilized at other times. If rush hour ridership can be reduced, then time and money can be saved.

So, recognizing that rush hour is costly, we can return to 5th Avenue.

The NY Times, here, The Economist, here,  and Stanford University, here, all have explained the positive incentives proposed by Stanford professor Balaji Prabhakar to shift commuting habits. Meanwhile, at econlife, here, we have discussed the high cost of free parking.

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