[sustran] Re: Driving Forces-further thoughts

[ITDP]

>

Just to raise one further point, Todd says

> The question is not whether motor vehicle use provides benefits. Obviously
> it does or people would not be shelling out a major portion of their income
> to drive. However, the real question is whether marginal benefits exceed
> marginal costs which would justify existing high levels of automobile use
> (probably not), and whether external marginal benefits exceed external
> marginal costs which would justify underpricing automobile use (almost
> certainly not). There is no reason to assume that there are significant
> external marginal benefits from driving (i.e., you benefit if all of your
> neighbors drive MORE than they do now) for the simple reason that rational
> consumers tend to internalize benefits and externalize costs. Researchers
> that have looked for external benefits have found few, and virtually no
> marginal external benefits.

The argument is not over whether there are external benefits from individuals
who drive, the way there are external costs.
I agree that there are not.  Where this comes up is in cost benefit analysis
about whether or not to invest in a new road.  There used to be some discussion
of quantifying 'economic development' benefits from new infrastructure above
and beyond the usual quantified benefits of reduced travel time and fuel for
existing drivers.  This was the classic Rosenstein-Rodan justification for
public investment into 'social overhead capital.'  Most of the time these
benefits are not quantified, but they probably could be. I'm just playing
devils advocate here.

Best,
Walter