Bryan Caplan  

Planes, Trains, and Automobiles

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Promising Abstract, Disappoint... Libertarian Principles...

Here are three surprising transportation factoids from Clifford Winston's Government Failure vs. Market Failure.

Winston on planes:

Airport expenses are covered by passenger facility charges and landing fees, which are set by local airport authorities based on an aircraft's weight... Congestion at a given airport varies by time of day in accordance with the volume of aircraft traffic. Aircraft weight has little effect on congestion because a plane waiting to take off or land is delayed by roughly the same amount of time as a jumbo jet as by a small private plane; thus, weight-based landing fees bear little relationship to airport congestion.

Winston on trains:

[W]ith the single exception of BART in the San Francisco area, every U.S. transit system actually reduced social welfare. Moreover, they [Winston and co-authors] could not identify an efficient pricing policy or physical restructuring of the rail network that would enhance any system's social desirability without effectively eliminating its service.

Winston on automobiles:

[R]eplacing gasoline taxes with marginal cost congestion tolls and pavement-wear taxes and building roads to optimal pavement thickness [i.e., markedly thicker] would generate an annual welfare gain of $23.9 billion.

This really is a fascinating book. Winston paints a picture of pro-market economic consensus that far surpasses even my own. The reason for the disparity, perhaps, is that Winston reports the consensus among active researchers, topic-by-topic, instead of just reporting what the average economist thinks.

I wonder if Dan Klein would agree?


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COMMENTS (5 to date)
Arnold Kriegbaum writes:

I guess it seems curious that more economists don't see our weak political leadership in the area of public expenditure and become motivated to run for office themselves to fix it. I would bet that their own salaries are too high and that most wouldn't like the pay cut. Too, the semi-reclusive nature of the economics biz is quite in contrast to the life style required of public elected officials. Also, though some would deny its importance, economists ARE very good mathematicians and maybe surmise that even if elected their one vote on any floor of any legislative body wouldn't change a thing.

meep writes:

I'm trying to figure out how BART increased social welfare, but the NYC subway decreased it.

I haven't read the paper, but the NY subway was originally built by a group of private investors led by financier August Belmont (of Belmont Stakes fame). He ran it so profitably that the city horned in on the deal when he wanted to expand it.

Then the inevitable happened, the city responded to politics and during the inflationary Teens and 20s kept fares below inflation. Which meant the end of Belmont's profits. The consortium eventually gave up and handed the whole system over to the city. It's never operated in the black since.

Daniel writes:

"[W]ith the single exception of BART in the San Francisco area, every U.S. transit system actually reduced social welfare. Moreover, they [Winston and co-authors] could not identify an efficient pricing policy or physical restructuring of the rail network that would enhance any system's social desirability without effectively eliminating its service."

I was once at a business ethics conference where about half the attendees were philosophers and the other half were business professors (most lawyers teaching business law). In a session I chaired, one of the philosophers gave his paper on the ideas of a person who's name I don't remember. The first comment from a philosopher in attendance was "why should we cut off the subsidy to Amtrack since airplane and automobile transportation are subsidized." My first thought was because two negatives don't make a positive. This quote gives another reason.

Dan Klein writes:

Bryan, Yes, looking at the published judgments of researchers on the issue is different than surveying economists at large. On many issues the former are much better than the latter.

Building on this insight, Econ Journal Watch is developing case-by-case investigations in the section called "Do Economists Reach a Conclusion?"

Here is the archive of papers in that section:

http://www.econjournalwatch.org/main/archive_section.php?categories_id=5

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