Keep It Simple

One other thought on Felix’s piece on Charles Komanoff and congestion pricing. Felix casts Komanoff, accurately I think, as a man obsessively devoted to documenting the full and complete cost of driving in Manhattan, block by block, moment by moment, so as to put together an ideal system of road pricing. The piece reads in part:

Komanoff is the kind of guy who takes a little while to get focused on a subject—but once focused can carry on more or less indefinitely. That’s exactly what happened with the spreadsheet he created for Kheel. It turned out to be relatively straightforward to calculate a congestion charge that would pay for public transit; Komanoff arrived at a fee of $16 for every vehicle trip into the central business district. But he knew that he could come up with a model that was much more sophisticated. “I gave them what they were looking for,” Komanoff says. “And then I kept on asking myself more questions.”

As an intellectual exercise, it’s useful to have detailed information on what costs are incurred where. And perhaps one day there will be autonomous vehicles capable of instantaneous processing of road demand and price information, leading to perfect route arbitrage. But for now, there’s quite a bit to be said in favor of the “$16 for every vehicle trip into the central business district” model. For a couple of reasons.

One is that any charge is going to be sent through the policy grinder en route to enactment, and so it doesn’t make a ton of sense to fine tune pricing before that process. Another is that for now, these prices have to be processed by human drivers, who are going to want simplicity and certainty. That $16 to get into the city is easy to understand and plan around.

And planning, we should remember, includes the long term as well as the short term. Even when vehicle computers can effortlessly crunch numbers to plan a given route, people are going to want to weigh the cumulative effect of those numbers in deciding where to live, what kind of car to buy, whether to drive at all, and so on. Less flexible pricing gives up some of the efficiency of the pricing system, but in return you get better decision making and a simpler system.

I understand the appeal of instantaneous variable tolling, but for now, I think flat peak and off-peak charges, with easy to understand scheduled increases, are probably the way to go.

Comments

  1. Cynic says:

    I had the same reaction, but not in such thoughtful or full-fledged form. It gets back to choice-architecture – economists love to posit infinitely capable rational actors, constantly weighing and reassessing costs and benefits. But we know, empirically, that sharply constraining the available choices actually serves to make a population more reactive to incentives. Infinitely variable pricing is nice in theory. A single, substantial, and fixed charge is far more likely to work in practice.

    And, on an entirely different note, I thought you’d be amused by this line in Nate Silver’s announcement this morning: “This all happened somewhat serendipitously, growing out of a conversation that I had with Gerald when I ran into him on a Amtrak platform in Boston ten weeks ago.”

    That’s right. In the bold new world of blogging, an agreement to host one of the best new blogs on an old media website was hatched…because of an encounter on mass transit along an urban corridor. This is what Conor misses. He can see the downside of what we have, and the upside of dispersion, but he misses out entirely on the converse – the benefits of the present arrangement, and the downside of its reversal. People bump into each other at unexpected moments. That serendipity of human contact is a major benefit of urban density and of mass transit – if Nate was driving from a small town in Utah to a hamlet in Nevada, he might have been free from the cultural hegemony of the megalopolis, but far fewer people would gain exposure to his ideas.