We’re in the midst of some family drama at the moment, so forgive the sparse posting this week.
Loren sent me a fascinating article this summer by Benjamin Ross in Dissent about ideology and traffic. Who knew that there was a politics of traffic? Really fun piece and worth checking out in full, but today I’m just pulling out one concept in the article, one that generated some debate around here:
This is especially true of the latest fad among the free marketeers, what are known as express toll lanes. These are pay lanes added to existing highways that currently don’t charge tolls. Toll rates vary from hour to hour, increased at times of heavy traffic in such a way that the toll lanes never back up. The main advantage of this procedure is that the driver who pays the toll is guaranteed a fast trip; on the busy suburban highways where these lanes are under consideration, there is so much traffic that simply widening the road would not get rid of congestion. Proponents argue that express toll lanes give the consumer more choice than building additional free lanes — when you need to get somewhere in a hurry, you pay the toll; when your time is less valuable, you don’t.
Express toll lanes were quickly dubbed “Lexus lanes.” Their promoters indignantly reject this appellation, claiming that the lanes benefit all income groups. But a 1999 survey of drivers on the first such project in the United States, SR 91 between Riverside and Orange counties in southern California, showed that drivers with incomes above $100,000 were about four times as likely than those who earn less than $40,000 to have used the toll lanes on their last trip on the highway….
These survey results suggest that the “Lexus lanes” moniker is well deserved. Who uses pay lanes is mostly determined by income. For most of the people in the free lanes, consumer sovereignty is a fiction. They haven’t made a voluntary decision that their time isn’t worth the price of a quicker commute. They are sitting in traffic jams because the toll exceeds what they can afford to pay.
OK, who likes Lexus lanes?
Apt. 11d 
snark: Why should roads be the only public benefit that rich people can’t pay extra to expedite?
I know there are use fees (permits and licenses) for a lot of things, like camping sites in public parks, but I don’t like this one.
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I don’t much like them, but not having them increases congestion for everyone. From a pure economics point of view (not something I’m 100% comfortable with, because $1=1 vote ain’t democracy), this does — as Kai Jones hints — allow the rich to expedite everyone’s service. The Lexus drivers get where they’re going much faster, but the used Chevy drivers get where they’re going a little faster, too.
There’s a fancy economics term for differential pricing to clear the market, but I’m not sure what it is. This is that, though.
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Is there an objection to toll lanes where the toll is waived if you are a high-occupancy vehicle?
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I like the proposed VA system (fd–a friend of mine did a lot of lobbying for it), in which the HOV lanes would be accessible to non-HOV vehicles paying a toll. Sometimes the ability to get out of DC quickly at 5–because you have something important and time-critical to do–is really valuable; the current option is to leave work 2 hours early, which is even more of a financial hit for many people.
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Good grief, privatising the roads? Its the one thing that we ought to want to privatise. These people could fly in private planes or helicopters, there’s no way of stopping them from getting better sevice. So let’s charge them for opting out. I’m in favour of the highest charge the market will bear, on condition, of course, that this exceeds, over time, the tax funds going into building, maintaining, etc, the roads. (OF course, if we are subsidising their congestion-free trip, that’s not ok). A country without a universal healthcare system can’t complain about having a two-tier (but universal) road system.
Brad Delong: do you know how the economics of this works out? (Not putting you on the spot, just assuming you’d know better than most, or at least better than I).
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I like them because they increase consumer surplus, providing a passable road for those who really, really need it. If you’ve ever had to pee really badly when stuck in line for the bridge, you might also appreciate it.
But YOU should like it because it is mostly used by rich people, thereby providing a nice stream of progressive tax revenue for the government, while simultaneously making some space for the rest of us on the road.
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I think the high-occupancy/toll concept is a pretty good one; it reduces the underutilization of the toll lanes, which reduces citizen complaints about “that damn empty diamond lane that I paid to build,” while allowing less-well-off workers to benefit by (a) somewhat reduced commute times in the free lanes and (b) permitting carpooling to get the benefit as well at no cost.
Or, to put it another way, “time is money” applies more to richer commuters than poor ones. Of course people who make $100k are more likely to pay to use the lanes than people who make $40k… this is Econ 101. The evidence doesn’t support “poor people can’t afford the toll,” because clearly some sub-$40k earners pay it; it supports “poor people are less likely to pay to avoid the congestion, because the benefit of getting there x minutes earlier isn’t worth $y to me.”
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I like them, and in fact, I wish that everyone had a taxi type ticker in their car that charged for number of miles driven, with an adder for high-use times, and that they received a bill at the end of the month. Think a model based on water use, with summer/winter rates and higher charges for use beyond a certain level, like we have for water in the Northwest. The “express” lanes would just cause an ad-on charge on your monthly bill.
Why do I think this is a good idea? I think the incremental cost of driving (both to the consumer — gas charges and the public — gas taxes).
bj
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OK, I’m imagining sitting in traffic on the GW bridge cursing life, and then watching some smug dude in a gold Lexus flying past me. Then here’s me remembering all the times that I had to prove myself over and over, while others with their degrees from fancy-pants colleges got a free ride. The fast lanes always go to the guys who have money. The metaphors alone would kill me.
Why not give the special lanes to those who have extra passengers, as Brad suggested, to relieve congestion. Those with fuel efficient cars can get the special lane, as well. To raise funds for road construction, add a sales taxes on Lexuses (sp?) and just increase the income tax.
I’m a big fan of the EZ pass system, which rewards people who use the roads regularly and who are organized enough to purchase the system. I still think that the poor end up the losers with the model, based on my unscientific observation of who goes through the EZ pass lanes. I’m not sure why, but the more beat up cars never go through those lanes.
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Laura – In the case of 91, the example in his article, the special lanes do go to the people who do the “right thing” – you get another person to ride with you, and you get to ride in for free, whether you make $1 or $1 billion. The only difference is that in addition to those people, people who are willing to spend $x to bypass the regular lanes are also allowed in. (The feds have also allowed states to let solo drivers with AFVs and hybrids in HOV lanes, but some states do this and others don’t.)
As for why people with beat-up cars don’t use the EZ-Pass lanes, I’d expect that regular commuters (who are the folks who would get an EZ-Pass) by and large use reliable transportation, and a rusted out 1984 Dodge Dart doesn’t qualify.
An alternative hypothesis is that you need a credit or debit card to establish an EZ-Pass account in most jurisdictions, and Dodge Dart driver doesn’t have one, or can’t afford to keep the minimum balance on the EZ-Pass account.
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In the DC suburbs in VA (where the “Lexus lanes” proposal I’m familiar with was), the current system is HOV-3–3 occupants per vehicle to use the high-speed lanes. The proposal was to increase it to HOV-4, and then to let people pay tolls if they had less than 4 people in the vehicle.
VA also lets hybrid cars use HOV lanes–I dislike that quite a lot. Hybrid cars are a luxury item, and IMO roads and parking are more of a problem with car-based commuting than fuel consumption.
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Paying to use the HOV lane without the inconvenience of extra riders is on the same continuum (though perhaps not quite as egregious) as paying someone to take your spot in the military draft (a la Civil War practice).
Then again, I’m guessing that if the Current Unpleasantness goes on long enough (and they manage to manipulate us into going to war with Iran) that when the draft is started up again, there *will* be such an out provided.
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Yeah Laura — that was me in the lexus zipping past you (but it’s silver, not gold). Oh, and I live on the opposite side of the country. And that it would be hard to classify my poverty-level imigrant as someone who got special breaks.
But, I think this brings up what we’re talking about — is it a class issue, a poverty issue, a funding issue, or a consumption issue? I care about the consumption. I think we’ve set up a road system that under-imposes the costs of use on the user. The only real way in which one’s use of the roads costs money is gas taxes and I think this doesn’t provide enough of an incentive to think about the cost of driving. We think about the cost of buses when we use them, but we don’t think about the cost of a car trip. So, people often make the psychological mistake of thinking that taking their car somewhere doesn’t cost something. I think we have to align the costs more fully with the use. [what I was trying to say in the rest of my mashed up post]
bj
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I suppose there are economic arguments for and against this, but to me it just seems too undemocratic.
OTOH maybe they could take lexus lane fees and build more pubtrans? That’s what this country really needs.
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bj: “I care about the consumption. I think we’ve set up a road system that underimposes the costs of use on the user. …”
That seems right to me.
jen: “I suppose there are economic arguments for and against this, but to me it just seems too undemocratic.”
Not wanting to derail a very interesting discussion, but this makes me think of an obvious analogy: the current debate over integrating market and quasi-market mechanisms into provincially managed healthcare systems in Canada.
Up here we have something eerily similar to chronically congested highways in our healthcare systems, and the I think a common intuition is that, even if (and that’s not a rhetorical “if”) a tiered arrangement — perhaps with the medical equivalent of Lexus lanes — would reduce wait times in the public system, the resultant inequalities would be unacceptable. Better that patients with comparable needs have similar (long) waiting times, rather than one being able to buy their way up the line — even if that might speed the whole line up (if, for instance, they opted for a private clinic rather than the public facility, and if — again, a big “if” — the existence of private clinics encouraged greater efficiency in the public system).
But like the traffic case, it seems that more discerning pricing mechanisms might improve the quality of the good or service for everyone and allow socially desirable investments based on transfers from the wealthy. If some inequalities (shorter commutes and MRI wait times for the wealthy) serve that goal, then I wonder if maybe we should be less fervent in our egalitarianism, and more attentive to the possibility that inequalities might be leveraged to everyone’s advantage.
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Privatisation is a great idea. I woudl kill to have an extra couple of lanes on the Merritt Pkwy and I would gladly pay to get home earlier or sleep some more depending upon the cost. I think the funny result would be that it woudl force economical usage to indirectly benfit the labor market(workers leaving earlier for work and staying later to avoid the costs.)And because its for profit, the companies runngn teh roads will increase the overall quality of roads operated or at least try and keep them open better. What scares me is what happens if a fiscally inept firm opens up roads and goes out of business. What are the contingencies to this?
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How nice to read such thoughtful comments on my article! (And without the usual abusive language of the internet.)
I’m happy to respond to Brad Delong (whose blog I enjoy a lot) and other commenters. I’ll get a little bit analytical since he’s on the site.
I have little problem in the abstract with express toll lanes if the tolls pay the entire cost of construction. The comparison to Canadian health care is interesting, but not altogether persuasive. Being told, because you’re poor, that you need to wait to get to the next exit is more like having to eat chicken instead of steak for dinner than like having to wait for a kidney transplant.
But tolls that pay the cost of construction are not what’s being proposed. What’s proposed is Lexus Lanes heavily subsidized by the taxpayers who can’t afford them. In the case I cite in my article, I-95 north of Baltimore, the tolls won’t raise even enough money to pay for the cost of providing separate access ramps which are needed for toll lanes but wouldn’t be needed if the lanes were free. In this case, a lesser amount of subsidy would have built the same number of free lanes. This is clearly unjust to people who can’t afford the new lanes but have to pay for them.
When you can’t build enough capacity to unclog a road, there are several ways you can allocate the capacity so as to prevent backups (which further reduce capacity):
a) by vehicle occupancy
b) by queuing (ramp metering which is now used in southern California)
c) by payment
Method (c) obviously favors people with more money. The only argument for using it nevertheless is that it brings in revenue. That’s generally a strong argument, but its force in any particular case depends entirely on how much revenue. In the case of express toll lanes, the answer is usually not much revenue.
The basic problem is that roads in our society are very heavily subsidized. If one were to measure subsidies not by amortizing historical outlays of cash to build the existing roads, but against the marginal cost of new expressway construction in urbanized areas, the subsidies would be truly stupendous. New pay highways simply can’t compete against the free competition that runs parallel to them.
(Yes, toll bridges make money, but they don’t have that competition. Toll highways like the Pennsylvania Turnpike make money mostly, I suspect, because they were built in rural areas and historical construction costs are much less than the marginal costs of added capacity.)
So the express toll lanes now proposed will have to be heavily subsidized (in general – there may be exceptions, but I think they will be quite rare) by the lower-income drivers who can’t afford to use them. Building general-purpose lanes would clearly be a more equitable use of the same money. (Though not often, in my opinion, a wise use — I think more money should be spent on transit.)
Openly admitting that we will spend billions on roads that will be jammed the day they open up would expose the irrationality of current transportation policies. Express toll lanes postpone the day of reckoning and keep the highway subsidies flowing. And they do get rid of congestion for the wealthy who have such disproportionate influence in our society.
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Now that I posted, I see in the end I didn’t answer Brad Delong’s question.
Maryland’s express toll initiative has rejected allowing high-occupancy vehicles to ride for free for two reasons:
1) There’s so much demand that HOVs would fill up an entire lane, leaving no room for paying customers.
2) Enforcement is nearly impossible. These lanes will have electronic toll collection through sensors, not toll booths, with cameras taking pictures of license plates when someone doesn’t pay. The cameras can’t tell how many passengers are in the car. A police officer looking on can’t tell whether the car with one rider is a cheater or a paying customer.
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Ben – So glad you could join us here on this conflict-adverse blog. All this repressed anger will most likely require extensive therapy at some time. I very much enjoyed your article and am quite flattered that you joined the discussion.
My main problem with the Lexus lane concept is that I’m not sure which problem it is aimed at solving: traffic congestion or road funding. If we’re looking to relieve traffic congestion, couldn’t we randomly choose any group of people to use the special lanes — carpoolers, environmentally friendly cars, organized commuters, busses. The bus lanes going through the tunnels are well utilized and encourage more people to take mass transportation, which relieves further congestion.
If we are looking to increase funding for roads, then I’m slightly more amenable to this idea. I do like bj’s concept of higher usage vehicles paying more, but that would probably have a regressive affect, since cabs and trucks are higher usage.
I think I’m having trouble with the main argument because living in the NYC area, all the major roads are toll roads. There are no free trips through NJ into NYC. I pay going over the highway and at the bridge. We pay a commuter tax and a bus pass.
Another comparison to Lexus lanes is when the city closes down an area of a public park for a fund raiser, which only rich people are allowed to attend. They periodically close Fort Tryon park in manhattan for a Rockfeller gala. The rich folks do donate a lot of money, but for a short time the public does not have access to a public good.
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The tolls you have to pay to go from New Jersey to New York are much more like a congestion charge, which I like, than a Lexus Lane. Since there’s no free competition, the tolls are paid at all hours and raise a lot of money, some of which is used to subsidize the PATH trains.
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I don’t see the problem.
Here in New Jersey, we are all free to either pay for the New Jersey Turnpike, or take the slower back roads for free. No one is complaining that the NJT is only for the rich.
Is the problem that the free and toll roads are directly adjacent, rather than separated by a large grassy, tree-lined median strip, like the free I-295 and toll Turnpike here is South Jersey?
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Laura, it looks like your post about resenting the guy in the gold Lexus has just proved Brad DeLong right and Megan McArdle wrong in their discussion of envy and spite in consumption (and throwing acid in the faces of beautiful models).
I’m with SamChevre in liking the lanes. I think you have a problem in having mixed lanes (HOV and tolls both getting you in) because there are enforcement problems. But it you have just tolls, a HOV vehicle spreads it out over more people, and if that encourages people to double up, you get a lot more use out of the resource which has already been paid for. As well, congestion is just a loss. Nobody gains, you sit there in traffic, you lose wages, you burn gas, it’s gone.
Here’s my hypothetical from the Virginia suburbs: three guys who work in Alexandria at a construction site or a restaurant, can’t afford Alexandria house prices, live in Woodbridge 20 miles away. Each makes $12 an hour. It would take 1/2 hour extra at the Woodbridge end to get together for a car pool and to drop off in the evening. It takes an hour to drive to Alexandria in the congestion, and costs $6 in gas wear tear. They all drive individually, and their commute costs each $12 in lost wages and $6 in gwt. $18 to get to work for a $100 work day. Now, you put an $9 toll on all cars taking the Lexus lane: they carpool. So do a LOT of people. And our gold Lexus guy, the $120-an-hour podiatrist at an Alexandria sports clinic, pays too. Everybody gets there in a 1/2 hour. The restaurant guys’ commute is: $12 in lost wages (1/2 hour setting up the car pool + 1/2 hour driving)$3 for a share of toll and $2 for gwt. Each now has a total commute cost $17. AND $9 has gone to public purposes rather than being pissed away in traffic. Plus the $9 from the podiatrist, who was going to drive to work anyway.
What’s not to like? Just losing the ability to enjoy the podiatrist’s suffering. Brad DeLong may be right that the restaurant guys will enjoy seeing him steaming in traffic next to them, and Laura you have said it will do a lot for you but it’s an awfully expensive way to make you and them happy. I’d rather have the $18 for mass transit, or more teachers or parks.
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Re: Lexus lanes
Okay, let me try it differently.
Assumption 1: That congestion of roads is a classic “Tragedy of the commons” i.e. poorly defined property rights means that everyone tries to maximize their own utility but results in everyone’s utility being reduced … we all sit in traffic
Assumption #2: Toll roads are hugely regressive form of taxation, not only because many people can’t afford the toll but also because they are often employed in jobs with the least ability to timeshift
Potential solution using technology: Combine a fast pass (with an ID card) with a monthly Earned Income Tax Credit, e.g. everyone below the poverty line would get a monthly deposit in their account, they could choose to spend it on tolls or not. If they can find alternatives they can use them, if not they are no worse off.
Next level problems:
a) Lack of financial services for the poor
b) What is the right amount for the deposit
c) How much must the tolls be to fund the transfer between the haves to have nots while still paying for the road?
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Dave — You make excellent points. Lexus lanes could have some benefits for the poor guy, as well as the rich guy. The poor guy does lose a greater percentage of his earnings to tolls than a rich guy. However, I think that other measures can be employed that get to that same ends of raising funds and relieving congestion without enabling rich guys from buying themselves out of a public problem.
The “congestion charge” and the lack of free alternatives that we have in Northern New Jersey does bring in funds that more than covers the cost of construction. It also subsidizes mass transportation which can serve the poor. This also has the benefit of relieving congestion, reducing pollution, and reducing parking pressures in urban areas.
There aren’t more roads in our area not because there isn’t enough revenue, but because there isn’t enough space. Raising more money from Lexus lanes wouldn’t help us at all.
I understand that other areas of the country have a different situations — the competition from free highways, the lack of funds for road construction, insufficient infrastructure for mass transportation to benefit the poor.
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Real-life experience doesn’t match Dave’s hypothetical in two respects. Plus, to judge the equity of the plan, you can’t just look at whether users of the toll lanes are better off; you have to look at non-users too.
1) The unstated assumption Dave makes is that an existing free lane is converted to a toll lane, and brings in more revenue. But that is not what’s being proposed in the US (except as an adjunct to new lanes). What’s proposed is a new lane, which has to be subsidized by non-users since the tolls won’t bring in enough money to build it.
2) In practice, as shown in California, most of the Lexus Lane users are wealthy, not low-income car poolers.
The majority of drivers (in a typical example with 3 free lanes and 2 toll) are on the free lanes. This has got to be the case, because if there’s less traffic on the free lanes than on the toll lanes no one will want to pay the toll.
The drivers on the free lanes are predominantly lower-and middle-income. They are paying for the Lexus Lanes through their taxes, and aren’t getting any benefit. That’s why Lexus Lanes — newly built toll lanes alongside pre-existing free lanes — are unfair.
Converting an existing lane on a highway to a toll lane, and using the revenue to subsidize transit, needs an entirely different analysis. In principle, it’s a good idea in my mind, although real-world proposals need to be scrutinized very carefully (because transportation is so heavily subsidized that equilibrium-type economics analysis can easily lead to false conclusions). But that’s not what the toll road lobby is pushing, not at all.
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Whether you’re talking unsafe tap water, pesticides on non-organic food, bad public schools, or ugly community parks, the rich will always be able to buy themselves out of public probelms.
But their tax dollars will still pay 90% of the bill for all our public services — even though they’re much less likely than you or I to use them.
As another DC-area commmuter, I second SamChevre’s first comment. Toll lanes are not where I would regularly choose to spend cash, but I’d love to have the option of a quick trip when I need it.
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We’d all like the option, but doesn’t it just seem wrong to anybody that we’re just trying to buy our way out of a problem without dealing with the symptoms? HOV lanes and rewarding carpooling, and increasing the mass transit infrastructure are the only really decent ways of fighting congestion and the things that cause it. And they are also the only real remedies for the additional problems of wear and tear on the roads and air pollution. Fewer people driving and fewer vehicles on the roads are the goals to shoot for, not making it easier for the peoplw who can afford it.
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