RE: How to end traffic congestion

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From: Dan Kohn (
Date: Mon Mar 06 2000 - 13:17:01 PST

Although I appreciate a good toilet metaphor as much as the next guy,
Xander's analogy unwittingly compares an ideal best case with a realistic
worse case.

The better analogy is that you are more than welcome to use your bathroom
any time of the day (a facility approximately as vital to most of us as our
cars). However, if you use it between 7 to 10 AM or 4 to 7 PM, the door
slams shut and locks for approximately 60 minutes (longer, if there's been
an "accident"). During the time you're locked in the bathroom, you are able
to listen to the radio and talk on your cellphone, but not read or watch TV.
Now, the question is, would you pay 5 or 10 bucks to get out?

If you value your time, you would. If you don't, then you could probably be
persuaded to go another time for the right price.

Note, however, that this metaphor still misses the externality of congestion
costs, that my driving during rush hour adds costs not just to me but to
everyone else on the road. It's eliminating these externalities which makes
this solution much better than just a zero-sum-game redistribution.

Xander is right to focus on elections, because this suggestion is
fundamentally about politics, and making most of the people better off (and
more, important, FEEL better off). The critical new idea here is that you
would actually pay people cash for off-hour driving, even if they don't have
an EZ-Pass unit installed in their car. I believe that could make the
difference, and solve road congestion in a way that technology and new roads
will never be able to do.

                - dan

P.S. Also, the problem with Xander's mention of public transportation, is
that subsidizing public transport is an absurdly inefficient and ineffective
way of dealing with the core problem. It would be like to trying to deal
with the public health problems of smoking by subsidizing the price of
chewing gum, and hoping that that would get people to switch. If you don't
want people to smoke (or to drive at certain times), then raise the price.

Daniel Kohn <>
tel:+1-425-602-6222  fax:+1-425-602-6223 

-----Original Message----- From: Alexander Blakely [] Sent: Monday, 2000-02-28 21:33 To: Dan Kohn Cc: Fork (E-mail); Brad De Long (E-mail); Tren Griffin Subject: Re: How to end traffic congestion

I agree with Karl Anderson's observation that Dan is relying a bit too heavily on rationality to manipulate the often irrational behavior of American drivers. The only other way to explain it is that Americans value their time much, much lower than do most other 'civilized' people. (A conclusion for which ample evidence can be found in the record high ratings for Fox's two-hour show "Who Wants to Marry a Multi-millionaire?)

Americans look at driving as a necessity, which 50 years of auto-friendly urban planning has made effectively true. To make a somewhat crude hypothetical example, image a small country with a chronic water shortage. There is enough water for everybody, just not all at once. Now if Dan were president of this unfortunate country, he would impose a toilet toll (using variable pricing according to congestion, of course). Now matter how smoothly (pardon the imagery) the waste flowed, not matter how much the country's GNP climbed, no matter how big the tax breaks during Dan's term in office, I guarantee that Dan would not be elected to a second term. And all because of his flawlessly rational toilet toll. Having to pay $20 to use the toilet when you need to is simply an indignity the citizens of this arid country simply won't take sitting down, so to speak. "But you forget," Dan will say in his unsuccessful campaign for reelection, "some of you were paid to poop at 1 a.m. Some of you made so much money 'working' the late shift that you were able to quit your day jobs. Surely you people will vote for me."

But they won't.

The problem lies not so much in pricing, but in choices. If President Dan, instead of imposing his toilet toll, were to offer grants to encourage the development alternative technologies to minimize the use of toilets, such as colostomy bags... Okay, this example is getting out of hand. I'll switch back to traffic. If people had viable options, they would use them. Unfortunately, there are very few substitutes for the door-to-door service of the automobile (even if it takes an extra 40 minutes). And until there is, I'm afraid that congestion pricing will only moderately reduce the quantity of drivers going through the toll booths while it significantly increases the quantity of voters going through election booths to vote out those damn rational incumbents.


Actually, the best way for Dan's plan to work would be to move Fox's prime time line up a few hours. Then people would surely be willing to pay $20 to get home in 20 minutes or less.

Dan Kohn wrote:

> In the last two weeks I've been to Boston, Atlanta, Charleston, DC, London, > and Paris and am now on a flight back to Seattle, and all this traveling > gives me a lot of time to think about traffic. Not net congestion, of > course, but the kind that can cause a trip from downtown London to Heathrow > to take over an hour. > > Now, please don't talk about how any kind of cool new auto-driving > technology will help things, because it will be decades before the legal > liability issues are resolved for any sort of technological solution. > Building more roads doesn't help because people just move farther away. HOV > lanes are completely unrealistic in today's work world, where factory shifts > are nearly a thing of the past. So, the answer has to lie in the world of > economics, and specifically in the sub-branch of political economics. > > Traffic congestion causes enormous costs on all of us in terms of the time > we're stuck unproductively in a car. And yes, cell-phones and NPR make our > car time more productive, but this is clearly not our optimal activity, as > evidenced by the fact that we don't keep sitting in our cars on arriving > home. Many of us who are stuck would pay others to get off the road, but > there is no mechanism to do this. The real problem, though, is one of > political economy. Most people would see variable rate toll pricing (the > obvious way to charge for the congestion one causes) as a tool to allow rich > people to drive whenever they want to, with no benefit to them. This > situation has been denigrated as "Lexus lanes". > > Economics says that to eliminate the externality of congestion costs, you > could internalize the costs by creating a market to incentivize drivers to > schedule their day in a way that doesn't create congestion costs for others. > The real solution has to be a political one, though, because people need to > accept that congestion costs and toll costs are being fairly allocated. > > So, here's the idea. Take a stretch of road that already has an E-Z Pass > system installed, like the Dulles Tollway. Announce that pricing will be > dynamically adjusted to keep the road basically free from congestion. That > is, prices could go up from the standard quarter to $10 or $20 or more when > the road gets crowded. You would want to do some sort of averaging over the > previous 30 minutes to avoid having outrageous instantaneous price spikes. > > The key, though, is that people who use the road off of rush hour would > receive a negative toll price: they would get paid for not having driven > during rush hour. The negative toll price would fluctuate as well, to > approximately equal the revenues brought in by the positive tolls. And, you > wouldn't institute this just for E-Z Pass customers. You'd actually be > handed a dollar (or whatever) by the tollbooth operator when you drive > through. Although, your license plate would need to be recorded, and the > roads would allow you to receive money back only once per day but would > require you to pay the going price (if it's positive) each time you came > through. Otherwise, someone could go through a short section of toll road > one way and circle back using back roads. > > Places like the NJ turnpike have tried differential pricing by time, but the > peak pricing has been less than 200% of the average ($0.50 vs. $1 doesn't > get people's attention). Congestion pricing (where you're aiming for zero > congestion) says that the price should keep going up until enough people are > persuaded to take a different route home or change their schedule. And in > this plan, people may very well be willing to pay those high prices because > they know that if they waited just an hour or so that they could actually > make money back rather than paying it out. So, it becomes a simple question > of opportunity cost. > > Also, note that this scheme is not just a redistribution of wealth from rich > people in a hurry to those who can't afford the peak toll rates. Congestion > is an externality that makes all of us poorer. Thus, eliminating it should > create enough economic value to make nearly everyone better off -- everyone > can get home without any congestion and those who are inconvenienced by > changing their schedules are paid for it. Of course, the plan would work > even better if people could get paged or use a WAP browser with the current > traffic/pricing conditions (they'd be synonymous), but there are all kinds > of optimizations one could look at it. > > The key thing is to get a test going, and to work the presentation of the > concept to win over people to the idea. > > - dan > -- > Daniel Kohn <> > tel:+1-425-602-6222 fax:+1-425-602-6223 >

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