[sustran] Re: WorldTransport Forum Economics of Traffic Congestion and TDM

[Jonathan E. D. Richmond]

There are important questions about what wage rate to use in these
congestion measures if they are to be used in making decisions. The income
of car owners is generally higher than those without cars, so in choosing
who to give "benefits," calculations using income of beneficiaries will
find that there is a greater "social benefit" from doing things that help
the rich rather than the poor.

This is one of the ways that expensive metro rail systems can be justified
over simpler bus alternatives, for example: it is argued that they are
more likely to take cars off the road, and the time savings to the former
road users are valued highly. The social value of improving basic urban
bus services for large numbers of people who depend on them is shown as
far less, by comparison, because the poor earn only a fraction of the
income of car users and their value of time is said to be much less.

What do others think? Should we, in social decision making, regard the
benefits to a poor person as worth less than those of a wealthier person?
If so, what sort of methodological change does that imply?

                                                           --Jonathan

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Jonathan E. D. Richmond                               02 524-5510 (office)
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