Normal
Eric A. Morris is a researcher at U.C.L.A.’s Institute of
Transportation Studies, concentrating on a variety of transportation issues
including history, economics, and management. He weighed
in here earlier on the gas tax. Here is his first of two posts on
road tolls.
Why You’ll Love Paying for Roads That
Used to Be Free
By
Eric A. Morris
A Guest Post
To end the scourge of traffic congestion,
Julius Caesar banned most carts from the streets of Rome during
daylight hours. It didn’t work — traffic jams just shifted to dusk. Two thousand
years later, we have put a man on the moon and developed garments infinitely
more practical than the toga, but we seem little nearer to solving the
congestion problem.
If you live in a city, particularly a large
one, you probably need little convincing that traffic congestion is frustrating
and wasteful. According to the Texas
Transportation Institute, the average American urban traveler lost 38
hours, nearly one full work week, to congestion in 2005. And congestion is
getting worse, not better; urban travelers in 1982 were delayed only 14 hours
that year.
Americans want action, but unfortunately there
aren’t too many great ideas about what that action might be. As Anthony
Downs‘s excellent book Still
Stuck in Traffic: Coping With Peak-Hour Traffic Congestion
chronicles, most of the proposed solutions are too difficult to implement, won’t
work, or both.
Fortunately, there is one remedy which is both
doable and largely guaranteed to succeed. In the space of a year or two we could
have you zipping along the 405 or the LIE at the height of rush hour at a
comfortable 55 miles per hour.
There’s just one small problem with this silver
bullet for congestion: many people seem to prefer the werewolf. Despite its
merits, this policy, which is known as “congestion pricing,” “value pricing,” or
“variable tolling,” is not an easy political sell.
For decades, economists and other
transportation thinkers have advocated imposing tolls that vary with congestion
levels on roadways. Simply put, the more congestion, the higher the toll, until
the congestion goes away.
To many people, this sounds like a scheme by
mustache-twirling bureaucrats and their academic apologists to fleece drivers
out of their hard-earned cash. Why should drivers have to pay to use roads their
tax dollars have already paid for? Won’t the remaining free roads be swamped as
drivers are forced off the tolled roads? Won’t the working-class and poor be the
victims here, as the tolled routes turn into “Lexus
lanes”?
And besides, adopting this policy would mean
listening to economists, and who wants to do that?
There’s a real problem with this logic, which
is that, on its own terms, it makes perfect sense (except for the listening to
economists part). Opponents of tolls are certainly not stupid, and their
arguments deserve serious consideration. But in the end, their concerns are
largely overblown, and the benefits of tolling swamp the potential
costs.
Unfortunately, it can be hard to convey this
because the theory behind tolling is somewhat complex and counterintuitive. This
is too bad, because variable tolling is an excellent public policy. Here’s why:
the basic economic theory is that when you give out something valuable — in this
case, road space — for less than its true value, shortages
result.
Ultimately, there’s no free lunch; instead of
paying with money, you pay with the effort and time needed to acquire the good.
Think of Soviet shoppers spending their lives in endless queues to purchase
artificially low-priced but exceedingly scarce goods. Then think of Americans
who can fulfill nearly any consumerist fantasy quickly but at a monetary cost.
Free but congested roads have left us shivering on the streets of
Moscow.
To consider it another way, delay is an
externality imposed by drivers on their peers. By driving onto a busy road and
contributing to congestion, drivers slow the speeds of others — but they never
have to pay for it, at least not directly. In the end, of course, everybody
pays, because as we impose congestion on others, others impose it on us. This
degenerates into a game that nobody can win.
Markets work best when externalities are
internalized: i.e., you pay for the hassle you inflict on others. I’ve blogged
on the externalities inherent in driving on this blog, and Levitt and
Dubner wrote about it here.
Using tolls to help internalize the congestion
externality would somewhat reduce the number of trips made on the most congested
roads at the peak usage periods; some trips would be moved to less congested
times and routes, and others would be foregone entirely. This way we would cut
down on the congestion costs we impose on each other.
Granted, tolls cannot fully cope with accidents
and other incidents, which are major causes of delay. But pricing can largely
eliminate chronic, recurring congestion. No matter how high the demand for a
road, there is a level of toll that will keep it flowing
freely.
To make tolling truly effective, the price must
be right. Too high a price drives away too many cars and the road does not
function at its capacity. Too low a price and congestion isn’t
licked.
The best solution is to vary the tolls in real
time based on an analysis of current traffic conditions. Pilot toll projects on
roads (like the I-394 in Minnesota and the I-15 in Southern California) use
sensors embedded in the pavement to monitor the number and speeds of vehicles on
the facility.
A simple computer program then determines the
number of cars that should be allowed in. The computer then calculates the level
of toll that will attract that number of cars — and no more. Prices are then
updated every few minutes on electronic message signs. Hi-tech transponders and
antenna arrays make waiting at toll booths a thing of the
past.
The bottom line is that speeds are kept high
(over 45 m.p.h.) so that throughput is higher than when vehicles are allowed to
crowd all at once onto roadways at rush hour, slowing traffic to a crawl (more
on how this works in a minute).
To maximize efficiency, economists would like
to price all travel, starting with the freeways. But given that elected
officials have no burning desire to lose their jobs, a more realistic option,
for now, is to toll just some freeway lanes that are either new capacity or
underused carpool lanes. The other lanes would be left free — and congested.
Drivers will then have a choice: wait or pay. Granted, neither is ideal. But
right now drivers have no choice at all.
What’s the bottom line here? The state of
Washington recently opened congestion-priced
lanes on its State Route 167. The peak toll in the first month of
operation (reached on the evening of Wednesday, May 21) was $5.75. I know, I
know, you would never pay such an exorbitant amount when America has taught you
that free roads are your birthright. But that money bought Washington drivers a
27-minute time savings. Is a half hour of your time worth
$6?
I think I already know the answer, and it is
“it depends.” Most people’s value of time varies widely depending on their
activities on any given day. Late for picking the kids up from daycare? Paying
$6 to save a half hour is an incredible bargain. Have to clean the house? The
longer your trip home takes, the better. Tolling will introduce a new level of
flexibility and freedom into your life, giving you the power to tailor your
travel costs to fit your schedule.
But is this fair? Haven’t we already paid for
these roads with our tax dollars? Won’t the wealthy buy their way out of
congestion, while the rest of us are stuck? And won’t conditions in the free
lanes deteriorate as they are packed with all the drivers who have fled the toll
lanes?
These are perfectly legitimate and important
concerns. But I should warn you: toll advocates are a pretty dogged bunch, and
they have an answer to everything. I’ll let you know their (quite convincing)
responses to these questions in my next post.
Eric A. Morris is a researcher at U.C.L.A.’s Institute of
Transportation Studies, concentrating on a variety of transportation issues
including history, economics, and management. Earlier this week, he
wrote the first half of a provocative essay on road tolls. Here is
the second half.
Why You’ll Love Paying for Roads That
Used to Be Free, Part Two
By Eric A. Morris
A
Guest Post
In my prior post, I blogged about introducing
variable tolls on America’s highways. The basic idea: fight congestion by
imposing tolls that vary in response to traffic levels. When roads are too
crowded, hike up the tolls, keep some drivers out, and thus keep traffic free
flowing at all times.
This idea is getting a lot of traction with
opinion-makers and transportation officials, but a skeptical public has yet to
be convinced. There is good reason for this; several perfectly valid arguments
can be raised against tolling.
Is it
fair that government will be charging for roads that motorists have already paid
for through the gas tax? Won’t this policy benefit the wealthy, who can easily
afford the tolls, and punish the poor? And what will happen to the drivers who
avoid the tolled facilities? Won’t conditions in the lanes that remain free
degenerate, as refugees from the tolled lanes pour in?
These are good questions, but toll advocates
have equally good answers. Believe it or not, converting some of the lanes on a
congested freeway to toll lanes should benefit everyone, even the people who
choose to never use the tolled lanes.
The reason has to do with the curious mechanics
of traffic congestion. When few cars are using a road, speeds are high, but the
light volume means few cars get through. Add more cars and eventually speeds
start to slow, but the increase in volume means that throughput rises. When a road is just crowded enough so
that speeds are around 45 m.p.h., the most cars are pumped through the
system.
But add even more cars and trouble starts.
Speeds break down, taking throughput down with them. When roads are severely
congested, you get a paradoxical situation: the more cars you jam in at one end,
the fewer come out the other end.
By pricing to keep traffic speeds at 45 m.p.h.
or a bit higher, the toll lanes will work with maximum efficiency. They’ll move
a lot more cars through than they did when they were congested. During the peak
periods on SR 91, the toll lanes handle 40 percent of the traffic despite the
fact that they constitute only one-third of the road surface. So the toll lanes
will actually ease the burden on the free lanes, hence the benefit even to those
who never choose to pay.
What about the argument that only the rich will
be able to afford these new “Lexus lanes”? Ed Sullivan of the
California Polytechnic State University has extensively
studied the express lanes on California’s SR 91, America’s first
variable toll facility.
He finds the equity issue isn’t nearly as
clear-cut as it may seem. Those with higher incomes and education do use the
toll facility more than others — but not that much more. Many low-income people
use the facility frequently; you don’t have to be rich for your time to be
valuable. Moreover, many wealthy drivers do not use the facility at all. In all,
Sullivan feels the “Lexus lanes” argument is largely a red
herring.
Interestingly, the most important factor in
predicting who will use toll lanes is not class, but gender. Women use the SR 91
tolled lanes 10 percent more than men do. This is probably due to the fact that
women’s travel patterns are more complicated than men’s, and that even in this
enlightened era, women undertake a disproportionate number of the
household-serving trips. Since women have a more difficult time balancing home
and work responsibilities, they are more likely to take advantage of the time
savings. In a weird way, tolling may strike a blow for gender equality
too.
Still, isn’t this just an excuse for government
to get its hands on even more of your precious dollars? Uh, well, O.K., you got
me on that one. Let’s not pretend government is jumping on this bandwagon due to
fear of the political might of the transportation economist lobby. Although
transportation officials are certainly cognizant of the many benefits tolling
will bring, fundamentally this issue is getting political traction (six states
have operational pilot programs) because the revenue is desperately
needed.
Transportation agencies at all levels of
government are in a serious financial bind. Thanks to the waning purchasing
power of the fuel taxes (again, see this),
they are facing unfunded maintenance backlogs, and fancy new projects seem like
pipe dreams. Tolls are a very promising source of new
revenue.
But is this a bad thing? Our transportation
system is in trouble and tolls are a fair way of raising the revenue to maintain
it. Shouldn’t users of the transportation system bear the burden of its
upkeep?
Even better, paying government to use the roads
would get us something for nothing. When you pay a toll, the money is
transferred from one party (you) to another (the government). Granted, it is
annoying to be the one doing the paying, but at least the money goes to a
(presumably) good cause, such as an improved transportation
system.
But when you sit stuck in traffic, your time is
wasted and no one is benefiting. Better to transfer money from one pocket to
another than to let all that time go up in smoke.
And there are other benefits. Since travelers
will want to split the cost of the tolls, they’ll have an incentive to
rideshare. And new possibilities will open up for transit, since buses that use
the tolled lanes will now be able to provide high-speed express services, even
on the most congested routes.
O.K., O.K., congestion pricing won’t cure the
common cold or bring peace to the Middle East; but it’s rare that a public
policy can produce so many winners with relatively small
costs.
Selling variable tolling to the voters will be
an uphill struggle, particularly when it comes to adding tolls to previously
free lanes. There is considerable skepticism about this policy. But there is
hope.
The early projects show that motorists
initially have doubts, but they become enthusiastic converts when they see and
use the facilities. According to the last survey, over 70 percent of SR 91
express-lane users — and even over half of the nonusers — approve of the use of
variable tolls. My guess is that someday you will too. Here’s hoping it will
cost you $6 to drive home in the near future.
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