Back when blog posts were composed with reed styluses on clay tablets, I put up a couple of posts (here and here) on fuel subsidies in the developing world. These are generally 1) fiscally ruinous; 2) terrible for the environment and traffic congestion; 3) highly regressive with regard to wealth distribution; and 4) market-distorting by artificially promoting fuel-guzzling industries. So I made the case that this is a pretty foolish public policy, in fact one of the worst I can think of. It’s up there with tobacco subsidies, the Concorde, pretty much everything the North Korean government has ever done, and our government’s failure in spending a paltry $615,000 taxpayer dollars for UC Santa Cruz students to digitize priceless Grateful Dead photographs, t-shirts and concert tickets.
Given the problems with fuel subsidies, I promised a third post on what to do to eliminate them. But since I have a day job, and being a professor is much more difficult than it looked when I was undergrad, I’ve procrastinated on putting this last post up. However, engineering student Kishore from India wrote asking where part three is, and customer satisfaction is a goal here at Freakonomics. Besides, no doubt governments around the world have been waiting impatiently for my post before they start dismantling their fuel subsidies, so here it is.
Given the damning case against fuel subsidies, and a rising swell of opinion that they are counterproductive on many levels, why don’t these policies go away? The IMF (see this) and I offer several reasons: Read More »
Last post, I wrote about how many nations in the developing world, such as Egypt, subsidize gasoline and diesel fuel to keep the price at the pump artificially low. There are many ways in which this policy is ineffective, counterproductive, and just plain dumb: it wrecks the public finances of cash-strapped countries in order to create traffic congestion and air pollution, raises the world price of oil, and transfers money from the poor to the wealthy.
In fact, writing about this folly got me pretty irritated, and I’m ashamed to admit I decided to take out my frustration on you readers. So I challenged you to come up with arguments in favor of fuel subsidies, manipulatively using the siren’s song of a prize of Freakonomics swag to get you to twist your brains into pretzels.
Thanks to those of you who gamely tried; many of you confessed it wasn’t easy. For example, poor reader Rob complained that “I’m getting a brain cramp trying to think of a defense for Egypt’s policy.” Rob, I apologize and recommend sitting in a dark room while listening to a CD of soothing ocean sounds for awhile. Read More »
There are plenty of transportation policy ideas which get my spider-sense tingling. But in most cases, I think it’s at least possible to form a coherent case in favor which doesn’t strain the basic tenets of logical argumentation. However, I am pretty much at a loss when it comes to government subsidies for transportation fuel, a strong candidate for the title of the world’s dumbest transportation policy.
In the developed world, governments often don’t tax fuel enough to make up for the externalities produced by driving. (Yes, United States, stop shuffling your feet and looking at the ground, I mean you.) But I’ve whined about that enough in the past.
In this post, let’s look at an even more egregious situation that is disturbingly prevalent in the developing world, especially in oil-producing countries (see this). Many governments not only do not tax fuel enough, but actually expend revenue to subsidize fuel and keep gas prices artificially low. In effect, they are paying people to drive. Read More »
I doubt this statement will shock you or light up the blogosphere, but drunk driving is bad. Our own Levitt has looked at the costs, and found that those who have had even one drink are seven times more likely to cause a fatal crash, while for those over the legal BAC limit the risk is multiplied by 13. This equates to a cost to society of more than 40 cents per drunk mile driven (2013 dollars), implying that a fine of $10,500 would be appropriate if drunk drivers were to bear the full cost of their actions.
The good news is that we have made tremendous progress. According to the National Highway Traffic Safety Administration, road fatalities due to drunk driving have dropped from 21,113 in 1982 to 9,878 in 2011. The decrease is even more remarkable given that total miles driven almost doubled during that period. So the drunk driving fatality rate per billion miles traveled has dropped from 13.4 to 3.4 in the last 30 years.
Some of this is due to general improvements in driving safety, such airbags and increased seatbelt use. But this is only a part of the equation. A suite of policies specific to alcohol has also been implemented, with considerable success. These have been recently analyzed by Susan A. Ferguson and Koyin Chang, Chin-Chih Wu, and Yung-Hsiang Ying, among others. Successful policies have included toughening laws and their enforcement, such as reducing permissible blood alcohol content (BAC) levels, especially for underage drinkers. Sobriety checkpoints are a very effective enforcement mechanism, particularly if properly publicized. Other policies that have been found to be effective are higher alcohol taxes (very), and to a lesser extent laws banning open alcohol containers in cars and higher legal drinking ages. Read More »
Thanks to those who participated in our call to sound off about your favorite and least favorite airports. The results:
At the top of the list of best airports, by a long way, was Amsterdam’s Schiphol. I have not flown into Schiphol myself, but I’m not at all surprised by this ranking, as the Dutch are genius urban planners. Schiphol has a branch of the Rijksmuseum art museum, displaying actual old masters, and a shopping mall which is open to the public as well as travelers.
- “Great options to suit everyone – awesome baby & kids facilities, casinos for dad and plenty of decent shopping as well as food options. It really made for an easy 6hr layover with baby.”—Cam
No, there are no “coffee shops,” in Schiphol, so don’t be attributing the glowing reviews to anything but the quality of the airport. (Perhaps the same cannot be said for Managua, Nicaragua, which reader ephman ranks as his favorite because “you can buy Oxycontin in the waiting area without a prescription to entertain yourself for the long flight to wherever you’re going.”) Read More »
The end of semester crunch is in full swing here at Clemson, leaving me little time to write a new post at the moment. So I figured I’d let you do my work for me. Readers, weigh in: what is your favorite and least favorite airport, and why? I’ll collate and post the results soon.
When you are a transportation professor, it is your privilege to hear a lot of zany ideas. I have heard about a scheme to create a fleet of intercontinental freight zeppelins (actually, this may not be quite as zany as it sounds). Fifty years after The Jetsons, there are still dogged advocates of flying cars. The most common thing I hear is that we should attack congestion by building monorails down the medians of the freeways. I have no idea how the monorail has bewitched our citizenry (too many trips to Disneyland?), or what precisely is so offensive about the idea of trains that run on two rails, but it’s amazing how beloved the monorail is, so much so that an episode of the Simpsons parodied it. Monorail! Monorail!
Because I love hearing people’s ideas and have no desire to be rude, I engage in an exacting regimen of meditation, yoga, and deep breathing so I can exhibit the equanimity of a lama when hearing goofy ideas. But occasionally something comes up that none of my mantras or self-hypnosis can handle.
Some thinkers make their reputations by focusing on social justice, economic progress, or global sustainability. I took the low road and went for horse manure. It was my article on filth, flies, and putrefying horse carcasses in the 19th century city that brought me to the attention of Dubner and Levitt and, for better or worse, to this site. FYI, the article is here.
If you do peruse it, you’ll see I ended with the hope that technology will bail us out of our transportation problems just like it bailed us out of those caused by the horse. At that time, a deus ex machina descended from the heavens to improbably solve the insoluble. The savior was known as the automobile, and as it went from obscurity to ubiquity in a few decades it banished the working horse—a primary mode of transportation for thousands of years—to oblivion.
There was only one problem with my call for a miraculous technological fix: I did not have the slightest idea what that technology would be. Read More »