Wednesday 24 November 2010

Time Magazine writes on Atlanta's HOT Lane but

unfortunately doesn't link pricing roads to the effect of pricing other goods and services.  Toll lanes of any kind should not be controversial, as there is a free alternative and people are paying for priority.   To reject this concept you should also reject it elsewhere.  After all, people have been paying more to bypass queues at airports and theme parks for years.   The key point is that road space has value, it is a scarce resource, and when demand exceeds supply, queuing eventuates and its value and efficiency dramatically declines (with other external costs such as increased pollution).

The article, available online as Congestion Pricing: To Skip Congestion, Atlanta Pays Up writes about the proposal to convert HOV lanes in Atlanta  (on the I-85) to HOT lanes, and to increase the HOV threshold from 2 to 3 vehicle occupants.  It makes the good point that it gives users a choice, although gives a little too much credence to the argument that such lanes only "benefit the rich" (presumably wealthy people aren't entitled to pay for things that benefit them), which is not true.   I don't see Time Magazine arguing that because it is not free that it only "benefits the rich" when it could be offering free copies.  

The value is that toll lanes are now being discussed more widely in general news coverage, and the hope is that this reduces controversy about them.  

One argument put forward in the article, that HOT lanes will become congested because they will be too popular, neglects the tools available to prevent this.   The obvious one is to increase the price.  It would not have taken much effort for Mike Billips (the journalist for Time who wrote the article) to investigate dynamically priced toll lanes elsewhere, (such as Minnesota's I-35W express lanes)  which manage demand effectively.  The second one is to increase the HOV threshold, which at 2 is effectively a free ride for couples.  Increases to 3 or even 4 are more likely to capture conscious car-poolers (as a side point, it would be interesting to see if any economic analysis has been undertaken to value what such thresholds should be, compared to HOT lane tolls).

The article does go off key a couple of other times.  For starters, HOT lanes are unlikely to be serious money spinners.  US$7 million p.a. is useful, but hardly worth getting too excited about.  Certainly this is unlikely to pay for new lanes in many cases, but is not really enough to completely motivate the introduction of such lanes.   Secondly, I don't know who told Mike Billips that the London Congestion Charge is about "noise and pollution".   It was never about noise, and the pollution was seen as a positive, but not the driver.   The single biggest reason for the London Congestion Charge was to reduce car traffic in central London to enable road space to be reallocated, primarily for buses, but also taxis, cyclists and pedestrians.

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