Watching minutes, ignoring hours
by David Morris
Originally published in Minneapolis Star Tribune, May 1, 2005
A few years ago the following tongue-in-cheek economics lesson made the rounds of mainstream news journals: Bill Gates would lose money if, on his way to work, he stopped to pick up a $100 bill.
Why? Over his business career Gates has earned about $300 a second; it would take about 4 seconds for him to stop and collect the $100.
Most readers immediately identify the key error in this argument. Putting a high monetary value on tiny amounts of time is improper, except in life-saving situations.
Yet valuing tiny amounts of time seems the primary rationale for massive increases in transportation spending. Or to be more precise, it is the primary justification for spending billions more on roads. When it comes to transit investments, however, the value of time is not taken into account, even when the amounts involved are so substantial as to impose quantifiable costs to individuals.
Policymakers should correct this inconsistency.
Last November, the Texas Transportation Institute (TTI) issued its latest Urban Mobility Report. The Twin Cities media reported the results with alarm. Traffic congestion now costs the average metro area commuter 42 hours a year, a tenfold increase since 1982! In 2003, the overall monetary cost of these delays approached $1 billion!
Opinion leaders and politicians of all political stripes expressed fears for the region’s future economic health if congestion worsens. Both political parties seized on the figures to justify spending billions of dollars more on roads.
But when we get behind the TTI numbers, we discover that on an individual basis, time lost to congestion is trivial. An annual delay of 42 hours translates into a daily delay of about 5 minutes per trip, 10 minutes per day. Since 1982, congestion delays have indeed increased more than tenfold. But in 1982, according to the TTI, congestion cost the typical metro commuter only 45 seconds a day. The TTI estimates delays whenever traffic moves more slowly than it does at 3 in the morning.
Other intriguing TTI figures went unreported. Since 1992, congestion in the metro area has increased only marginally. Moreover, a massive road construction program would only modestly reduce congestion.
When it comes to estimating the costs and benefits of transit, however, time seems to have little or no value. Yet cutbacks in transit service can and do impose far greater time hardships on individuals.
A deficit in road construction translates into a few minutes’ longer travel time. That’s an inconvenience, to be sure. A deficit in transit, on the other hand, dramatically disrupts thousands of lives. Wouldn’t we all agree that the monetary value and life burden of a two-hour daily time delay because a bus is no longer operating is far greater than 10-minute driving delay?
The Metropolitan Council proposes to cancel or reduce service on 70 percent of its routes. What is the cost in time lost and additional expense to transit users, especially for the one-third of riders who do not own cars?
Apparently, no calculations have been done. I suspect that if one were done we would discover that the additional real cost to transit customers far exceeds the savings to Metro Transit itself. In other words, while a cost-benefit analysis only marginally supports increased road construction, it would significantly support increasing transit spending.
Many would respond that while such a calculation might be intellectually valid, it is politically impossible. We’ve established a system in which large and growing sums are dedicated to building roads while small and declining amounts of money are dedicated to expanding transit.
Back in the 1920s, when 95 percent of Minnesota lived in rural areas and muddy roads literally stopped traffic, we enacted a constitutional provision that all gas taxes must be spent on roads. About 70 years later we made our transit systems’ budgets dependent on the sale of cars!
We made the rules, and we can change the rules. The first step in doing so would be to stop giving more value to the loss of trivial amounts of time by large numbers of metro residents than the value of the loss of substantial, life-wrenching amounts of time to smaller numbers of metro residents.
David Morris is vice-president of the Minneapolis and Washington, D.C., based Institute for Local Self-Reliance (www.ilsr.org).