[lbo-talk] The Planet is Fine

Wojtek S wsoko52 at gmail.com
Wed Dec 21 07:20:22 PST 2011


Jordan: "Gas isn't the only cost of your trip; AAA estimates about $0.70/mi all-in for an average car. "

[WS:] True. But what matters is marginal cost - $50 in case of driving and $300 in case of Amtrak. You still need to pay the "sunk cost" of automobile ownership (the cost of the vehicle, insurance, maintenance, etc.) even if you take the train.

However, the high marginal cost of public goods in the US is a valid point. Transit receives higher subsidies elsewhere, which makes the fares lower vis a vis private goods. In many European countries the marginal cost of driving is much higher than the marginal cost of taking the train - although that may not be the case for a family of four.

I also concur with Gar's point that tax (price) alone is insufficient to for changing behavior from driving to taking transit. Availability of adequate transit infrastructure is necessary. I would also like to add one more element to the mix - social status and expectation associated with driving. People can endure higher prices and inconvenience of congestion if they perceive it as the price to pay for the social prestige bestowed by driving or, which is more the case of Etats Unis - for not having to mingle with the riff raff.

A few years ago I attended a meeting in Moscow. Although Moscow has excellent public transit system - one of the best in the world. Yet, my hosts sent a car to the airport to pick me up. Consequently, I spend over 2 hours in traffic on a trip which would have taken me just over an hour by transit. And this was on Saturday, when the traffic was relatively light. On my way back, I insisted that I want to take transit, and my hosts were nonplussed. For them, this was what "commoners" do (not that I am not a commoner, but foreign guests and the intelligentsia enjoy a high social status in Russia.)

Wojtek



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