An Economist Looks at the Cost of Congestion

We had a robust discussion here several months ago about the Cost of Congestion report.

Now, local economist Joe Cortright has penciled out his perspective. Joe is perhaps best known for his The Young and the Restless report looking at what influences young, highly educated workers in the choice of cities and regions to live in. Much of Joe’s work is about the engine of innovation driving our economy.

Joe’s commentary, entitled “30 seconds over Portland” reaches the conclusion that the $6B (yes, Billion) in investment suggested in the report, would yield 30 seconds of time savings on the average trip.

8 responses to “An Economist Looks at the Cost of Congestion”

  1. I guess this is an illustration of why economics is called the “dismal science.” Like many people who are afraid to use insight, this guy analyzes numerous sources of data, develops models, projects the implementation of them, blah, blah, blah.

    The people in this region could tell what would make traffic flow better. For one, find shortcuts to replace circuitous routes. If possible relieve pressure on overburdened routes to forestall major, costly upgrades. Follow the “if it ain’t broke, don’t fix it” principle.
    Stay away from consultants with their own private agendas. Solicit public opinion on how to reduce costs. In other words, what Portlanders are already doing….

  2. Joe raises a much larger issue with his last paragraph:

    “Before spending $6 billion on additional transportation investments, we might want to consider what the economic benefits of alternative investments, such as increasing the quality of the region’s higher education or K-12 education.”

    This is actually a question that can be asked about current transportation investments as well. But there is very little apparent interest in abandoning other public investments to fund education, despite studies that show investments in early childhood development have the greatest economic return of any public investment.

    His second point is very important for evaluating the relative merit of different investments:

    “Shorter average trips would produce the same result — It’s worth noting that a reduction in average trip lengths of about one-quarter of a mile would achieve exactly the same time savings”

    Spending $6 billion so that people can live a quarter mile further from work seems like an awful waste of money.

    In any case, the bulk of the Portland region’s curren transportation investments seem to be directed at increasing the opportunities for lengthy commutes, not reducing them.

    The I5 Columbia River Crossing discussion, for instance, seems to be entirely focused on facilitating more people commuting from rural Clark County to jobs, services and entertainment in Portland. Simply tolling the bridges would reduce the number of commuters making that long trip and eliminate the need for the new bridge entirely in the short run. But it would not bring federal dollars into the region so …

  3. Unless I’m missing something here, isn’t the “average trip time” irrelevant? The purpose of these investments is to improve SPECIFIC trips or collections of trips, not the AVERAGE trip. Did investing in Westside MAX make a trip from Sellwood to downtown any shorter? Almost certainly not. But it did make the trip from Beaverton to downtown shorter for those who choose to ride it, and slightly shorter for those who drive the route.

    That point (significant as it is) aside, however, I maintain (much to economists’ chagrin, no doubt) that decreasing travel time is by no means the sole purpose of these investments. While that may be a desired and actual effect, it ignores the other goals of such projects, such as increasing travel capacity (irrespective of travel time), providing travel options, and addressing environmental concerns.

    Am I reading his commentary totally wrong? Even if I am, it seems to be a fluff piece. No amount of arguing will convince me that taking average trip lengths and dividing by average trip speeds will produce any sort of meaningful statistic. Then again, I’m an engineer, not an economist, so I don’t understand the purpose of abstraction to the point of irrelevance.

  4. Am I reading his commentary totally wrong?

    I read his commentary to mean that proposed investments in _automobile_ infrastructure will be of very limited benefit, and that alternatives (ie, transit) should be given more serious consideration.

    I think you may actually find you are in agreement with him, unless I’ve read your comment completely wrong. ;-)

    – Bob R.

  5. Ron, Joe is anything but dismal. He’s one of the smarter people I know on the issue of what drives regional economies. I think his point is that spending big bucks on a general upgrade of the system doesn’t have great ROI. We need to be a lot more intelligent and strategic in our investments, which I think is in line with what you are saying.

  6. Chris, maybe you could add a page to the site called “common abbreviations” for stupid (or really, really tired) folks like me who forget what things like ROI stand for.

    On the subject at hand, what if instead of looking at how we could spend an extra 6 billion, we looked at how we could better spend the 4 billion (currently planed expense). What happens, for example, if more of the 4 billion went to improving street connectivity, adding bike/ped/transit improvments, etc? Or if we just gradually increased gas tax to the point where gas is $5/gallon[1]?

    1: hey it might as well go to public use instead of Exxon…

  7. No amount of arguing will convince me that taking average trip lengths and dividing by average trip speeds will produce any sort of meaningful statistic

    I suspect Cortright would agree with you. But it is that kind of calculation – estimating how long trips will take in 25 years – that went into determining the projected economic benefits of additional transportation investments. I think his point was that the actual, non-monetarized, benefit was much less than appeared from the dollar value attached to it.

    And then, of course, he suggested that that 6 billion dollars could have much more real economic benefits if invested elsewhere. And that many of the benefits from the transportation investments could be accomplished in other ways – like making the average trip shorter.

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