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The behavioral economics of car sharing

March 20, 2011

Sometimes after having bought my ticket I realize I am watching a bad movie. Should I leave or should I stay? Experimental evidence shows that many people do not leave, even if they had better things to do with their time. Money is already gone, and it does not make any difference to continue until the end of a bad movie. The time and money spent to get the tickets do not matter, and I should better leave the movie theatre and do something more entertaining.

In the eighties two psychologists conducted an experiment. If you were one of the subjects, you would have been asked to imagine having paid $100 for a ski trip to Jackson Hole and $20 for a ski trip to Colorado Spring. For some reasons, you prefer the ski trip to Colorado Spring, but you made a mistake with dates and hotel reservations, which overlap. Therefore, you have to chose only one of the two destinations. What would you choose? Most subjects chose the most expensive trip, instead of the preferred one. Whatever is the final choice, the total bill is going to be $120, so why do they choose the less attractive alternative?

Both behaviors are common and show how we tend to stick to our own commitments we have made even if it is not the most sensible thing to do. Psychologists called it sunk-cost effect. What has this to do with cars? If I buy a car, I want to get the most out of it. And that is good, but this also means that I want to drive my car even when driving is not the quickest or the most comfortable option. Even worse, I do not even consider the alternatives;  I just take the keys and drive without calculating the costs of gas, the time in traffic and the extra time needed to find a parking spot. Sometimes public transit would be cheaper and faster, but once I own a car, I do not care about the alternatives and their opportunity-costs. I drive.

Having access to a car sharing service could reduce the need to buy a car, and, for each trip, we have an incentive to compare which mode of transportation is the most convenient for us, because we have to pay the actual cost for each trip we make. A well developed car-sharing service provides a double benefit in terms of lower traffic congestion: it reduces the need to own a car, and it moderates the urge to drive one.

Moving Beyond the Automobile: Car Sharing from Streetfilms on Vimeo.


The most congested cities in Europe…and in America

March 17, 2011

In my previous post, I mentioned the results released by Tomtom on the most congested cities in Europe. Tomtom is a manufacturer of navigation systems used in cars. Inrix, another manufacturer of navigation systems for cars, regularly publishes a list of the most congested cities in Europe and United States. Global position systems (gps) allow to accurately follow the route and speed of cars, and to assess on which road and in which cities car traffic is slow. In 2010, Inrix’international comparison rankss the metropolitan areas of Los Angeles and New York at the top of the list, as the most congested cities where cars travel at the slowest average speed. Paris comes third, the slowest in Europe. After the Chicago and Washington DC metropolitan areas, London is the second most congested city in Europe. Contrary to the Tomtom’s ranking, Bruxelles is not among of the most congested cities in Europe. Rome and Madrid are not ranked.

The most congested cities in Europe

March 15, 2011

As I read posts and articles on which city in the US is the most congested by car traffic I ask myself whether there is an objective method to measure quantitatively, rather than qualitatively, the degree of road congestion. Recently, I read a news article about the most congested city in Europe. Nothing new under the sun, I said at first, but I found that both the method and author deserve a mention. Tomtom, a Dutch manufacturer of navigation systems that uses global positioning (GPS), has for the first time published a list of the most congested cities in Europe. Tomtom gathered and collected data through gps installed in cars and calculated their speed on certain roads. A road was deemed congested if cars travelled at an average speed lower than the 70% of the local speed limit. Tomtom then ranked cities according to the percentage of congested roads out of the total network in the metropolitan area. For instance, a road with a speed limit of 30 mph is congested if the average speed is below 21 mph.  That is an objective and quantitative measure of traffic congestion.

Bruxelles is the most congested city in Europe, London comes fourth, Paris only ninth, while Rome and Amsterdam are 14th and 15th, respectively.

Traffic congestion in European cities(% of roads whose average speed is  70% below the speed limit)
City % of congested roads
1 Bruxelles 37.7
2 Warsaw 37.5
3 Wroclaw 35.7
4 London 34.7
5 Edinburgh 34.5
6 Dublin 33.9
7 Belfast 31.8
8 Marseille 31.2
9 Paris 30.4
10 Luxemburg 29.4
11 Milan 29.4
12 Rotterdam 28.8
13 Birmingham 28.5
14 Rome 28.0
15 Amsterdam 27.7
16 Oslo 26.4
17 Barcellona 26.3
18 Budapest 26.2
19 Naples 26.1
20 Poznan 25.4
21 Lódz 25.0
22 Turin 24.2
23 Palermo 24.1
24 Prague 23.6
25 Genoa 22.7
26 Cardiff 22.6
27 Vienna 22.4
28 Munich 22.4
29 Leeds 21.8
30 Kracow 21.2
31 Essen 21.1
32 Hamburg 20.6
33 Lisbon 20.0
34 Sheffield 19.5
35 Stuttgart 19.1
36 Cologne 18.1
37 Dusseldorf 17.9
38 Berlin 17.2
39 Talllinn 16.8
40 Helsinki 16.8
41 Nuremberg 16.7
42 Madrid 16.3
43 Frankfurt 15.3
44 Hannover 14.8
45 Glasgow 14.7
46 Bremen 14.6
47 Copenhagen 13.9
48 Bratislava 13.7
49 Seville 13.6
50 Berne 10.9
52 Vilnius 10.8
52 Leipzig 10.6
53 Dresden 9.7
54 Dortmund 9.3
55 Malaga 7.9
56 Stockholm 6.4
57 Zagreb 5.9
58 Valencia 5.3
59 Saragoza 1.5
Fonte: Tomtom

Once we have found a methodology, yet imperfect, to measure the degree of traffic congestion of a city, the next step will be to to reduce that traffic congestion. Few cities have applied congestion prices to reduce commuting by car and has just released a new video that shows some examples.

Moving Beyond the Automobile: Congestion Pricing from Streetfilms on Vimeo.

Voting with your pedals

March 12, 2011

In New York, people are getting excited about bike lanes, which are taking road space away from cars. The transportation commissioner of New York City, Janette Sadik-Khan, has added 250 miles of new bike lanes in the last four years bringing the total network to 400 miles. The new bike lane on Prospect Park West is just one mile long, but that was enough for the former transportation commissioner, Iris Weinshall, to file a lawsuit challenging this last mile.

A new bike lane in Brooklyn

This community fight has drawn the attention of superstar bloggers with a national audience. John Cassidy, from The New Yorker, has blamed the city’s “bike lane policy as a classic case of regulatory capture by a small faddist minority intent on foisting its bipedalist views” and calls for a cost-benefit analysis on the opportunity to open new bike lanes serving a small group of bikers. The economics behind the Cassidy’s post of March 8 enraged many economists, who wrote in the following two days a bunch of searing hot posts. The most vociferous was Felix Solomon from Reuters, who argued that Cassidy was not aware of the role of the negative externalities associated with car driving. Cassidy took it personally, he just wrote a book about the subject, and reacted by publishing two posts in a row that were meant to offer a defense and a détente. That was not enough to prevent the broadside from The Economist’s blog, free exchange, which ridiculed Cassidy’s economic perspective. The kiss of death came from Paul Krugman on the New York Times.  Other notable bloggers also contributed to the debate.

Evidence gathered by Chalrles Komanoff, condensed in his Excel spreadsheet Balanced Tranportation Analyzer with tons of data on New York City traffic, suggests that cars have a massive amount  of free space and cheap parking at their disposal, which provide a powerful incentive to drive and to drive more, imposing costs on others without bearing any consequence. These costs take two forms: air pollution and traffic congestion. Smaller road capacity would bring fewer cars on the streets and lower revenues for the city. However, revenues from parking meters do not cover the full costs of driving, while building and maintaining bike lanes are virtually free for the city’s coffers. Comparing the costs with the benefits suggests that taking precious road space away from cars is a good thing.

Now, what if New Yorkers could vote according to their usual mode of transportation? Less than 30% of New Yorkers travel by car; the majority takes the bus/metro and walks.

How many parking spaces do 60 people need?

March 8, 2011

I have been involved in parking economics, community activism and local politics for the last 6 weeks now. It does not make a résumé, does it? But it is exciting to talk with local politicos trying to convince them that you have something useful to say, but most importantly convenient for them to hear.

Six weeks ago local authorities notified the residents living in the buildings on my street in Rome that the construction of an underground parking garage had been authorized. After just a week, construction workers showed up and started cutting trees. “A car in every garage” has become a garage for every car, because we love cars. I am not a tree hugger, and I have to form an informed and rational conviction as to whether this garage will be suitable for my neighborhood and my community. So better not being carried away by the emotional appeal coming from the fear of change, which is constant, Benjamin Disraeli would add.

Local authorities claim that there are too many cars parked on the street, which generate traffic congestion and hinder urban mobility. So their goal is to take cars off the street by building underground parking garages. However, among the local citizens’ top fears is the expectation that bigger roads will attract more cars, more air and acoustic pollution. There is an alternative option: more public transit would translate into fewer cars on the streets and less space for parking. In fact, to carry 60 people from home to the workplace requires 50 cars, which, in turn, require parking lots where to leave them to rest for at least 7 or 8 hours per day. The same number of people can be carried by just one bus, which would not sit idle in a parking lot for hours since it can keep on carrying more passengers for the rest of the day. A bus company in Thun, a small town in Switzerland,  visualized the idea of how much parking space 50 citizens would need to park their cars.

to go to work 60 people need about 50 car parking spaces


or just one bus


How many lanes do cars need to carry 50 thousand people to their workplace?

March 7, 2011

The public space of a city is a scarce resource and a valuable commodity. We need to make the best use of it, and public transport serves this purpose compared to cars, which consume so much capacity area in terms of roads and parking space. I do not see much disagreement among observers on which mode of transportation is most air polluting when moving people around. However, it is not the first thing that comes to my mind how much more space cars need as they spend most of their time sitting idle in a parking lot, an estimate suggests 95%, occupying space citizens would rather see employed for alternative uses. But remarkably few of us can visualize how much more space cars require to move people from home to their offices and back. The International Association of Public Transport, a network of public transport authorities, provides a way to visualize this.

To carry 50 thousand people in an hour, in one direction, requires a 175mt wide road dedicated only to cars, that is, a 46-lane highway in one direction. Got the picture? If the road were only half that wide, those 50,000 people would take two hours. Fortunately, there are more efficient ways to carry the same number of people. If those people traveled by bus or street car they would need a road fourth fifth smaller, or a road of only 9 lanes, saving 37 lanes compared to a 46-lane highway full of cars. By metro or train, the saving is even bigger: only two lanes suffices.

How people travel from home to their work has a tremendous impact on city congestion and the use of urban space. Despite a trip in a car from home to work consumes much more urban space than the same trip made by metro or bus, car drivers get subsidies to drive their cars through free road infrastructures and free parking, most of the time and almost everywhere.

Few ideas for the future of transportation

February 2, 2011

Beauty is in the eyes of the beholder, so don’t jump to conclusions too soon. U.S. “infrastructures used to be the best”, said Barack Obama, while exorting America to “change the situation immediately”.  The Infrastructurist‘s blog wasn’t caught off gard. It came up with 6 ideas for the future of transportation. Bad or badly good ideas?

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