Could Gas Cost More Than Your Car?

A major story on the NBC Today Show was about the sharp rise in the price of gasoline.  One “expert” claimed that, unless you have a very fuel-efficient vehicle, over a car’s lifetime gasoline will cost you more than the purchase price.  Really?  Say a new car costs $20,000, and is driven for 10 years, 12,000 miles/year.  If gasoline is $4/gallon, and the car gets a paltry 24 miles/gallon, today’s average for new cars, gasoline costs $20,000. So, even without discounting. the “expert” is wrong. 

Even if gas were $5/gallon, unless one discounts the future at a rate below 1 percent, the present value of the gasoline purchased is less than the price of the car.  I doubt that there are many new vehicles for which the expert statement is true, even if gas prices rise permanently far above the current price.  I do wish so-called “experts” knew the basics of Econ 1.

An End to the Gas Tax?

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.

To my mind, Governor Bob McDonnell has fashioned one such idea. He is proposing eliminating the state’s gas tax.

We Once Had Self-Driving Cars

A frequent response to the dysfunctions of American air travel is technological: namely, self-driving cars (also see this article). In a self-driving car, you can relax, even sleep, while being driven safely to your destination at 60 mph. We once had such a system. It's called a train network.

Compared to air or car travel, a decent train network is cheaper, more environmentally friendly, and quicker. As an example, I'll compare two door-to-door, city-center-to-city-center journeys.

From Horse Power to Horsepower to Processing Power

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.

Can Mass Transit Save the Environment? Right Wing or Left Wing, Here's a Post Everybody Can Hate

A major rationale — perhaps the major rationale — touted by supporters of mass transit is that by reducing our output of greenhouse gases and other pollutants, transit can help save the environment. The proposition seems intuitive and even obvious: by no longer encasing each traveler in thousands of pounds of difficult-to-move metal, surely transit is more energy-efficient. Plenty of analyses prove this. But then again, Aristotle, who was revered as the infallible font of truth for more than 1,000 years, proved that heavier objects fall faster than lighter ones and that women have fewer teeth than men. Might studies that demonstrate transit is greener be similarly wrong?

They might. The reason is that many studies of energy efficiency by mode often make questionable and -- depending on the author's point of view -- self-serving assumptions. The main trick is to look at autos with but one passenger and compare them to transit vehicles in which every seat is full. (For example, see this.)

But in the real world, this is emphatically not the case.

Austin's New Toll Lanes

Traffic in Austin is a mess, mainly because the city is long and linear (east-west travel is made difficult by the topography). In increasingly long rush hours, traffic barely moves on either north-south freeway. To solve the problem, the city is adding one lane in each direction to one freeway, but there will be tolls on that lane. Moreover, the tolls will be variable — but not by time of day or day of week. They will vary with traffic speed, rising when the average speed in the lane drops below 50 mph. Pretty neat — peak-load pricing taken to its logical extreme. The technology that makes this possible is fairly recent. And it’s a good example of how technical improvements raise well-being — in this case, allowing those whose value of time is high to substitute money for their time and reducing congestion on the “free” lanes for the rest of us.

Special Parking for Hybrids

My wife took four grandkids to the Adventure Aquarium in Camden, New Jersey.  Looking for a parking space, she noticed the usual handicapped parking spots near the entrance, but also parking spaces reserved for hybrid vehicles.  The Aquarium, though not government-run, appears concerned about environmental issues and apparently tries to encourage energy conservation by making a visit easier for those who have chosen energy-efficient vehicles.  The private sector is implicitly subsidizing the purchase of hybrid cars, not by offering monetary incentives, but by subsidizing the time cost of owning these cars.  I suppose one can object that the subsidy matters more to those whose time is more valuable—presumably higher earners; but it’s still a neat way for the private sector to encourage energy efficiency.  I wonder how many other examples exist of explicit non-monetary subsidies by the private sector? (HT to FWH)

Are Good Manufacturing Jobs Bad News for Education?

Here's a fascinating new working paper from Yale economist David G. Atkin, called "Endogenous Skill Acquisition and Export Manufacturing in Mexico" (abstract here; PDF of an earlier version here). The gist:

This paper presents empirical evidence that the growth of export manufacturing in Mexico during a period of major trade reforms, the years 1986-2000, altered the distribution of education.  I use variation in the timing of factory openings across municipalities to show that school dropout increased with local expansions in export manufacturing. The magnitudes I find suggest that for every twenty jobs created, one student dropped out of school at grade 9 rather than continuing through to grade 12.  These effects are driven by the least-skilled export-manufacturing jobs which raised the opportunity cost of schooling for students at the margin.

It makes sense, of course, that students on the margin might happily abandon school in favor of a good job. But is that necessarily a bad thing? How should a society balance jobs and educational ambition? And who should be thinking harder about this issue -- India or China? Or perhaps the U.S.?

Towing Exchange

Fellow blogger Daniel Hamermesh recently explained the virtues of exchange as a painter helped him break into his Berlin apartment. My exchange example is not as glamorous. Shopping at the local co-op in Cambridge, I heard over the public-address system, "If you are the owner of a gray Subaru Outback, you are being towed!" I leaped over a low chain and made a break for the parking lot, as a mother nearby offered to watch my daughters (ages 1 and 4). The Subaru was hooked up and about to be hoisted onto the tow truck. In view of my timely arrival, the tow-truck operator offered two options: Pick up the car later that day in Somerville for $200, or pay $50 (cash) and he'd unhook the car now. An offer I couldn't refuse. Everybody gained, yet I am still furious!

Is a Meat-Eating Cyclist a Contradiction?

In response to James McWilliams's still-reverberating post about why more environmentalists don't promote veganism, a reader named Mary writes:

I have always wondered why environmentalists are so reluctant to promote veganism, but eager to promote alternative transportation. Many residents of the U.S. are currently locked in to their car-dependent lifestyle, with large mortgages in suburbs with no safe sidewalks or bike lanes and inefficient transit. Ditching their car is logistically much more difficult to do than buying beans instead of meat at the grocery store. Currently, the infrastructure for reducing car use is lacking in many communities, though vegan foods, like beans, grains, fruits, and vegetables, are much more easily obtained.

It's an interesting point. A few related thoughts come to mind: