[sustran] Re: express toll roads + Robert Moses and the NMA

[Todd Alexander Litman]

The economic theory is easy enough, the problem 
is political: how to convince citizens to support 
fees for something they are accustomed to getting 
for free (http://www.vtpi.org/tdm/tdm35.htm ).

The demand curve for automobile travel has a very 
long tail, meaning that if the price is low 
enough consumers will continue to increase their 
vehicle mileage and demand more road capacity, 
although the net benefits to consumers are small, 
and negative when all costs (including 
externalities) are considered. Automobile travel 
demand is actually quite price sensitive, 
although most of the costs are fixed and so 
individual fees (fuel taxes, road tolls, etc.) seem relatively inelastic.

In other words, motorists demand more road 
capacity as long as somebody else subsidizes 
their facilities, but when charged the full 
marginal costs of constructing new roadways 
(including, as you point out overhead costs such 
as maintenance and fee collection) the demand 
disappears. It would be more efficient overall to 
price existing roads to limit demand, and only 
build roads where, after this is done the 
increased capacity would be funded through user 
fees. However, it is politically difficult to 
impose fees on currently unpriced roads, although 
it is possible if voters receive some indirect 
benefit, such as reduced general taxes or 
improved transit service (http://www.vtpi.org/tdm/tdm70.htm ).

Toll proponents claim, correctly, that it is more 
fair and efficient to price new roadway capacity 
than to continue to give it away, as  is 
generally done. However, they often oppose the 
truly efficient strategy, which is to price 
existing roadways as a way to test consumers 
willingness-to-pay for existing demand. The 
challenge we face is to find ways to begin 
pricing existing road capacity. Any equity issues 
are easily addressed, based on how revenues are 
used (see http://www.vtpi.org/revenue.pdf ).


Best wishes,
-Todd Litman

At 11:49 PM 12/12/2005, Eric Britton wrote:
>1.         TOLL ROADS
>
>Somebody help me here on the first one of these, 
>because my take on it is so terribly simple that 
>I must be missing something important.
>
>Which of the following statements is 
>sufficiently wrong that what we have to do is 
>give up and let them build their new roads anywhere and as they wish?
>
>    * In a modern democratic society with many 
> charges to assure well-being and social 
> justice, it is only “fair” to put “full cost” 
> prices on all scarce goods, including those 
> which are funded through taxpayer contributions 
> such as roads – covering all of the well known 
> externalities.  No argument this side of the 
> religious right and maddog left, okay?
>    * (As a nuance, the price should also cover 
> the cost of collection, which can lead to more 
> subtle distinctions but that we can handle case by case.)
>    * Given the information and analytic tools 
> we now have at our disposal it is pretty easy 
> to distinguish situations in which new roads 
> are really needed and justified -- but in 
> places like the Northeast of the States, or 
> many parts of Europe, this justification on a 
> level playing field is going to be pretty hard to find.
>    * So, the only remaining question is where and how to collect.
>    * This is a classic ‘politics of 
> transportation’ challenge (but that’s what we 
> are supposed to be doing here anyway).
>    * And what about this as a possible wrinkle to be considered?
>    * In addition to NOT using “toll 
> justifications for unnecessary additional 
> investments”, including by private entities 
> charged with the whole lot, we rather introduce 
> something along the order of orderly “escalator 
> charges” when we bring the tolls in on existing 
> roads.  These would start at a low level, maybe 
> just enough to cover the costs of collection in 
> a first instance. But then proceed over our set 
> period, let’s take a ten year period as an 
> example to argue, to bring the rates up to the 
> level (very high it usually turns out) so that 
> the users will in good time be paying full costs.
>    * This gives all the players plenty of time 
> to adjust their habits – and at the same time 
> for the responsible public sector to bring in 
> new more environmental and “space efficient” 
> (that phrase keeps coming up) transportation alternatives.
>    * Note: In an ideal world, that escalator 
> will be set by law (and popular support) so 
> that some later group of politicos cannot come 
> in and sweep it away because they now have their hands in the cookie jar.
>
>
>B.        The new mobility surrogate for Bob Moses:
>
>I have been thinking about Robert Moses, who one 
>pretty good reference 
>(<http://en.wikipedia.org/wiki/Robert_Moses>http://en.wikipedia.org/wiki/Robert_Moses) 
>characterizes as “master builder .. and shaper 
>of a modern city”.  Moses was, as many of you 
>know, not only a great road guy, but also a 
>master of political manipulation to make sure 
>that his agenda got done ("if the ends don't 
>justify the means, what does?").  Other times, 
>other heroes, but that’s not the point here.
>
>My late night thinking just concluded was 
>suggesting that “what we need” today is a Robert 
>Moses – someone who can make the New Mobility 
>Agenda (call it what you will) happen.
>
>Hmm. And hmm again.
>
>The trick of course is that Moses performance 
>was made possible by the fact that he was 
>distributing great gobs of contracts and money, 
>which fed in this case not so much into his 
>personal bank account (he was on to other forms 
>of satisfaction) but into those of his political 
>backers. This made for a very powerful industrial/political machine indeed.
>
>Now back to new mobility, which unlike old 
>mobility is characterized by its general 
>parsimoniousness.  Indeed, to a good extent that‘s what it’s all about.
>
>So where and how do we get the new mobility surrogate for Bob Moses?
>
>Item for discussion?
>
>Eric Britton
>
>
>
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>================================================================
>SUSTRAN-DISCUSS is a forum devoted to discussion 
>of people-centred, equitable and sustainable 
>transport with a focus on developing countries 
>(the 'Global South'). Because of the history of 
>the list, the main focus is on urban transport policy in Asia.


Sincerely,
Todd Alexander Litman
Victoria Transport Policy Institute (www.vtpi.org)
litman at vtpi.org
Phone & Fax 250-360-1560
1250 Rudlin Street, Victoria, BC, V8V 3R7, CANADA
“Efficiency - Equity - Clarity”

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