Tuesday, March 1, 2011

Congestion Pricing

Megan McArdle has a post up about congestion pricing. She writes:
Congestion pricing and/or express tolling is one of those things that seemingly all men of good will--i.e., liberal, conservative, and libertarian policy wonks living in a handful of coastal cities--can agree about.

[big snip]

But that brings us to the heart of the populist argument against congestion pricing, and even express toll lanes, and I think ultimately supports Tim's argument that this is never going to be democratically popular: most people don't pay. And they tend to resent the people who do. It is not an accident that congestion pricing is a system most beloved of people who are a) relatively affluent and/or b) don't drive to work. This tells us empirically why congestion pricing is unlikely to ever get enough political support to be implemented in America. But maybe it also tells us, maybe, why it shouldn't be implemented. Who are we to tell people that they ought to prefer prices to queuing?

In one weird way, the liberal preference for congestion pricing is odd and FLG thinks of this every time he's stuck in traffic. If we consider that lawyer in the BMW's time is worth, say $250 per hour, and the maid in the Corolla's is worth, say $15 per hour, then traffic jams are a massively progressive way of distributing scarce resources. Everybody is treated exactly equally.


Anonymous said...

Well, there is clearly congestion pricing for groceries - it's just not at the Giant. When you need it right away and no line, you go to seven eleven. dave.s.

nadezhda said...

Sigh. I assume you're just feeling your usual snarky self. However, you seem to be under the misapprehension that American "progressives" or "lefties" or whatever-label-you're-in-the-mood-for are committed to the promotion of egalitarian misery.

Congestion pricing is, objectively, win-win -- those who value speedier trips and can pay do, and the rest benefit from less congestion. The main challenge is setting the price point.

One difficulty may arise, in some cultures, when we factor in subjective notions of "fairness". And if empirically (oooh, scary, scary concept) those subjective factors undermine the workability of congestion pricing, then us pragmatists (devils though we may be) won't pursue it.

Since the idea has been known to work in some cases, however, it'll take a bit more than McMegan's handwringing to satisfy empirical standards.

nadezhda said...

OT - re decline in equity mkts/IPOs in the US vs Emerging Mkts, you may find this post from Bronte Capital (Aussie fund mgr) interesting. Not surprisingly, looks like the PE-->IPO route in Emerging Mkts is looking kinda frothy. His tale of the China scam (see his earlier posts) is delicious.

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