Common Tragedies

Thoughts on Environmental Economics

Congestion suggestions

Posted by Daniel Hall on December 11, 2007

Today’s New York Times has an article about some of the options that Manhattan is considering in place of, or perhaps in addition to, Mayor Bloomberg’s congestion pricing proposal. It sounds like there are three main options on the table:

You wouldn’t be able to hail a cab in Manhattan below 86th Street, where cabs would be allowed to pick up passengers only at taxi stands scattered throughout the area.

You wouldn’t be able to drive in Manhattan on the 5th, the 15th or the 25th of every month if your license plate ends in a 5. And parking on the street would cost you as much as parking in a garage.

It’s not entirely clear to me whether the first proposal would much reduce traffic or if it would just rearrange it. Sorting cabs into stands might help prevent some taxis from cruising and searching for passengers, but the article also points out that cabs may spend more time driving to the busiest stands. And the plan wouldn’t raise any money which could be used to support mass transit and help reduce congestion further.

I’m very skeptical of the second option. Blanket bans sound like they will work well and be easy to enforce, but they tend to create funny incentive structures that people will work around. I suspect that in the specific proposal listed there would be quick development of a secondary market in ‘alternative’ license plates. Alternately, as the article mentions, this could encourage residents to get a cheap second car that has a different license plate number. I’m sure this proposal would cut congestion some — there are always law-abiding citizens willing to play by the rules — but probably by less than a naive calculation would suggest. Further, it would do so without a way to compensate for different levels of inconvenience among affected residents. This is the problem with blanket bans rather than policies that work at the margin — you not only prevent marginal value trips, but you also prevent the very highest value trips.

The third suggestion sounds most promising — indeed, it might be a good idea to implement in addition to a congestion pricing scheme. Although I haven’t read it, Donald Shoup’s book The High Cost of Free Parking apparently argues that up to one-third of traffic in major cities comes from cars circling to look for cheap and convenient curbside parking. While I don’t know what went into that estimate — it strikes me as pretty high — if drivers had to pay $10 per hour for curbside parking rather than $1 or $2, there would certainly be fewer trips into the downtown district, as people substituted towards public transit (or even taxis which wouldn’t have to circle for a space). Further, raising curbside parking rates to match garage parking rates should reduce quantity demanded, allowing the city to eliminate curb parking on some streets and thus improve traffic flow along those streets. And like other pricing schemes, it has the advantage it works on the margin — it eliminates the lowest-value uses, while still permitting high-value trips for those who need them.

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