Planes, Trains, and Automobiles

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.

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.

"[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.

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