Privatization Briefs

What Congestion Costs

When news accounts take note of the cost of traffic congestion, chances are they cite figures from the Texas Transportation Institute’s Urban Mobility Report. The report is widely respected and is especially useful for tracking the growth of congestion over time and for comparing its intensity in different urban areas. But TTI researchers consider only our nation’s largest areas and only look at the cost of wasted time and wasted fuel. In other words, the analysis overlooks much of the misery that congestion causes.

The chief economist of the U.S. Department of Transportation has provided a more complete estimate of national traffic congestion costs. In addition to the $63.1 billion in wasted time and fuel reported by TTI for the largest metro areas, add another $12.8 billion for similar costs in all other metro areas. DOT estimates $38 billion in annual costs due to productivity losses, another $38 billion due to unreliability, $3.8 billion due to cargo delay, and $12.6 billion in safety and environmental costs of congestion. So a more complete figure for the cost of congestion is $168.3 billion, more than double the widely reported TTI figure.

How much is your time worth?

People tend to bristle at road pricing when they think of it in the abstract, but they’re friendlier to it when they experience it firsthand. Why?

Part of the reason is because we value our time more than we say we do. UC Irvine economist David Brownstone examined the preferences of motorists on a stretch of San Diego’s 1-15 Freeway. There drivers can use the regular lanes or pay a variable toll to escape congestion. Brownstone discovered a big gap between what people tell survey takers about the value of their time and what they actually do when they have the chance to buy some extra time. He found that motorists value their time about twice as much as they say they do in surveys.

Why does congestion keep getting worse?

Politicians often blame the sorry state of mobility on money. There just isn’t enough of it to improve our transportation system, they say. It’s true that our current approach to highway finance (based mostly on fuel taxes) is in deep trouble. Since fuel taxes aren’t indexed to inflation, their buying power continues to shrink. Improved fuel efficiency means we get even less bang for our fuel tax buck. Lawmakers often throw up their hands because they assume motorists will never accept higher fuel taxes or toll roads.

They might be right about fuel taxes, but more and more evidence suggests that motorists are warming to the idea of tolls. In Atlanta 54 percent of survey respondents are “supportive” or “very supportive” of congestion-based tolls. In Denver, 78 percent of survey respondents support express toll lanes. Californians prefer tolls to taxes and in Washington, D.C. commuters prefer tolls to taxes by a two-to-one margin.

Learning from France

France has shown ways around (or under?) some problems that many Americans are quick to regard as insurmountable. A missing link in the A86 Paris ring road had long generated terrible congestion, yet officials were understandably hesitant to complete the road because it would have meant building through portions of historic Versailles. But the French did not just give in to congestion. They are filling in the missing link by building tunnels deep beneath the earth, thus preserving a historic space and improving mobility.

We think of France as proudly distinguishing itself from free-market America, but when it comes to transportation policy, the French are quick to make use of market-based innovations. Many of our leaders worry that there isn’t enough money to fight congestion, but the French often build roads with funding from the private sector. The A86 tunnels are being built with private money and France’s 5000-mile tolled motorway system is investor-owned.

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