MILLS13

Mills Chapter 13: Urban Transportation

Review of Theoretical Role of Transportation

1. Firms that export from an urban area have an incentive to locate near railroads, ports, or highway interchanges.

2. Households that provide the work force or consume local goods have an incentive to locate near employers and retailers. However, against this incentive is the desire for space and amenities in outlying areas.

3. Intracity movement of people for the exchange of labor services is called commuting. It is generally assumed that a transportation network that is adequate for commuting meets other demands that are placed upon it, especially during off-peak periods.

Personal Transport

1. Commuting makes up about 25 percent of intrurban trips miles, with shopping, recreation, and personal trips to visit friends and relatives, makes up the bulk of what's left.

2. The supply side of commuting is clearly the public sectors responsibilities. Streets are publicly owned and maintained while public transit facilities are either owned or regulated by the public sector.

3. The demand for personal transport is more complex. Motor vehicles (cars and trucks) are privately owned, subject to user fees, taxes, or fares. Alternative methods and freedom of choice prevail between private auto use and public transit use, even though payment for some trips (school buses) are coerced. (Parents may still choose to drive their children or carpool, even though they pay school taxes.) School buses are justified as a public subsidy to those that cannot afford automobiles as a complement to public education.

4. The fact that demand depends upon consumer choice among available modes makes demand analysis complicated by issues such as needs and tastes as well as income and automobile ownership. Households can express dissatisfaction with transportation service brought by the public sector by purchasing the services of another alternative mode.

5. Alternative schools of though exist with regard to the role of urban policy toward public transportation. These views can be summarized as follows:

a. Large public investments in mass transportation can save cities from strangulation of congestion and pollution.

b. The automobile is so advantageous to suburban commuters that urban expressways are the only solution that is consistent with commuter demands.

c. Finally, a third school of thought advocates a balanced urban-transportation system with both public transit and urban expressways.

6. The design and details of urban-transportation investments must be tailored to the size, structure, and existing transportation facilities of each urban area. Minimum threshold effects, coverage alternatives, and present and future land use densities must be examined.

Trends in Urban Transportation

1. Rapid increases in urban population, incomes, automobile ownership, and suburbanization have increased the relative importance of the automobile relative to public transit since World War II. (See Table 13.1)

2. Transit data is frequently measures by number of passengers, while automobile use is measured in number of vehicle miles. Automobile use is 11 times higher in 1990 than in 1940.

3. On the average there are about 1.5 passengers per car and the average public transit trip is about five miles. These two measures applied to 1990 data indicate that more than 95 percent of commuter miles traveled are by car with only 5 percent by public transit.

4. The postwar decline in public transit has been accompanied by a shift away from fixed rails. Bus use has been relatively stable since 1970.

5. Much of the problem of urban transportation is a peak-load problem resulting from morning and evening commuting. The diversity of destination has increased resulting in commuting patterns that include "reverse commuting" as well as traditional suburban to Central City trips. Cross-town and circumferial highway commuting is on the increase with the decentralization of jobs. (Table 13.2)

6. Suburban dwellers are more likely to drive alone than are central city dwellers and are less likely to use public transit. (Table 13.3) Public transit is more likely to be used by blacks among central city dwellers.

7. In general, automobile use dominates urban travel relative to other modes, but by less for commuter trips than for other forms of urban travel.

8. Regardless of public policy, urban automobile use for commuting may have passed its peak. At 95 percent of transit usage the percentage gain will slow, and urban demand on highways and central-city streets are stabilizing. If public transit increases even a little, then urban congestion could actually decrease.

Modal Choice Model

1. The decision by an individual about which transportation mode to use for commuting depends upon (a) money cost, (b) time cost, (c) comfort, and (d) convenience.

(a) Money cost is the cost of operation of a car (ignoring fixed cost that must be paid anyhow, versus the fare cost of public transit.

(b) Time cost is the value placed upon commuter time (from one-half to one-third hourly income).

(d) Convenience is based upon the scheduling and proximity of public transit. It is important in the collection and distribution phases of the trip, as opposed to the line-haul phase.

2. A hypothetical example can show if auto commuters are rational in their use of a private auto as opposed to "a love affair with their automobile."

Suppose there are two commuters. White lives 10 miles from the central city in which he works while Green lives only 5 miles from the central city. White values his travel time at $6.00 per hour, while Green values his travel time at $3.00 per hour. Both are assumed to own an automobile with an operating cost of 12 cents per mile. Fixed costs are omitted.

Travel Factors	White's	Choice	Green's	Choice
	Auto	Transit	Auto	Transit
One-way trip	length
miles	10	10	5	5
time (minutes)	25	50	20	30
Operating	cost
@ 12 cents/mile	$2.40	$0	$1.20	$0
Transit fare (50 cents per segment)	$0	$2.00	$0	$1.00
Parking	$2.00	$0	$2.00	$0
Time Costs	$5.00	$10.00	$2.00	$3.00
Total Cost	$9.40	$12.00	$5.20	$4.00

3. Note that the rational choice of White is a private automobile while the rational choice of Green is public transit.

4. Models of modal choice show that people make substitutions between fares and travel time, where the value of travel time depends upon people's income (wage rate).

5. Studies show that savings of time spent walking and waiting is valued at two to four times the value placed upon line-haul travel time. Collection and distribution travel time costs are a serious impediment to public transit use.

6. Park and ride options lower collection costs and reduce parking costs associated with central cities.

7. Parking costs are not considered in suburban to suburban commuters. Also, time costs are generally lower for reverse commuters in terms of congestion encountered that slows travel time.

Congestion and Pricing

1. Congestion is a peak-load problem that differs in the short-run when capacity is fixed from the long-run when capacity can be expanded.

2. Short-run congestion should be optimized through appropriate pricing or other cost internalization policies before long-term investment is considered.

3. A model for expressway pricing. Congestion is the difference between MC and AC that includes the external cost to all users when an additional traveler enters the expressway.

4. Efficient short-run pricing equates price with marginal cost (including congestion cost). A congestion toll should be paid during peak periods but not during off peak periods. Congestion tolls have been criticized for the method of collection, but modern automatic vehicle identification (AVI) sensors can be used by regular commuters and they can be billed through their home or place of work. Time of day pricing could also be applied based upon when the reading occurred. Political support for time-of-day tolls and even tolls themselves has been relatively weak.

5. The amount of the toll should be the difference between AC and MC. The effect it has on reducing congestion depends upon the slope of the demand curve. The more substitutes available to automobile use or with respect to time of day commuting, the more elastic the demand curve and, hence, the more a congestion toll will reduce traffic density.

6. Alternative to tolls are stop lights that govern traffic density during peak periods. Other less flexible and efficient pricing are higher central city parking fees, gasoline taxes, commuter taxes. Public-transit subsidies to encourage bus usage is an even less efficient way of affecting congestion since it does not force commuters to internalize congestion costs.

7. In areas of town with higher land costs the AC and MC of commuting rises more rapidly and higher tolls should be charged to lessen capacity requirements even though greater congestion exists.

Long-run Investment with Constant Costs

1. If short-run pricing is used that generates revenue for capital expansion, then capacity may be expanded at constant cost until the LRAC = LRMC = MC.

2. This decision is not difficult provided the demand curve can be forecasted. However, capacity expansion invariably increases demand because "searchers" that were using other routes, persons using other modes, and persons choosing other travel times will be attracted to the additional capacity.

3. Hence, expansion in LRAC that moves down a given demand curve until the short run price no longer exceeds LRMC may not be the final outcome of capacity expansion.

Cost and Supply of Urban Transit

1. It appears that additional transportation infrastructure is justified if the short-run marginal cost exceeds the long-run average cost. But, the optimum investment may not be in roadways, since other alternatives may exist.

2. Traffic planners examine the tradeoffs among alternative transit systems, including total, out-of-pocket, time (including congestion), and pollution costs. Tradeoffs occur among alternative systems. (Time versus pollution costs, for example.)

3. Urban-travel analysis examines the cost of travel along a corridor, basically an artery from a suburban residential area to the CBD. Comparisons are made among the full costs of travel along a corridor via each mode, assuming the optimum use of available technology for that mode.

4. The higher the fixed cost the more threshold demand requirement and the greater the influence of traffic density on lowing average costs. In general, automobile usage has a relatively low fixed cost, followed by buses, and then fixed rails. The cheapest mode has the lowest average cost for that transport corridor density.

5. Keeler study (1975) found that for a six-mile line-haul trip the automobile is the cheapest mode at demand densities less than 2,000 per hour, but at any greater density a bus network is cheaper. A subway is competitive with the automobile at 20,000 persons per hour, but even at 30,000 passengers per hour the rail mode is three times as expensive as a bus system.

6. He concluded that for the top 20 urban areas (population in excess of one million) an optimum bus system is the cheapest way to deliver workers to the CBD. Except under special circumstances the automobile is a cheaper mode for smaller cities, for non-work travel, and for non-CBD work travel. No area can economically justify a new subway system versus an integrated bus system.

7. The DC subway system opened in 1976 had six major lines in operation by 1981. To be economically viable they should run at least 20,000 passengers per hour per line (or 120,000 passengers per hour total). There are only 110,000 riders per corridor that work in DC, or about 55,000 potential riders per hour over a two-hour rush hour. If all of these workers took the subway it would still not be economically viable.

Effect of Transportation on Urban Structure

1. The foregoing analysis takes the home origin and work destination as givens, i.e. it assumes that the transportation system has no effect on work or home locations.

2. But, the analysis of rent gradients showed that land prices and transportation costs represent a tradeoff that affects residential density. Some have maintained that a change in the transit system would stop or delay the decay of the downtown area, eliminate urban sprawl, and solve some of the problems in urban ghettos.

3. The strongest claims are exaggerated since even the best designed urban transit systems have only moderate effect on reducing the total time and money cost of commuting.

4. Despite claims for under investment in public transit systems, the existing automobile based transportation system is not much more costly than one with a better mix of public transit and automobiles.

5. Radial transit systems are designed to lower the cost of transport and make rent values lower in the inner city (flatten the rent gradient). The CBD would be more attractive for business firms, increasing inner city employment versus the suburbs.

6. However, the increased employment opportunities in the CBD may not necessarily benefit the poor as opposed to well-educated and well-paid suburbanites.

7. In summary, the development of major transit improvements from the suburbs to the CBD would probably slow but not reverse employment decentralization and would hasten the flattening of population density functions.

Transportation and Urban Poverty

1. Urban poverty enters into the transportation system two ways:

a. Low income housing areas are frequently demolished to make room for

construction of expressways. This is not restricted to slum areas of the central city.

b. The urban expressway system provides a subsidy income bias in favor of upper income groups that can afford cars and use the system for journey to work trips.

2. Many labor specialists believe that ghetto unemployment rates are high, partly because of lack of access to suburban jobs.

3. The problem is not basically one of transportation. It is more the result of housing market segregation. The provision of transit systems from ghettos to suburban job locations might be viewed as a way of maintaining all-white suburbs, when a longer term more obvious solution would be to open up suburban housing to minorities.

4. Little is known about what transit system would be best for ghetto residents. It is clear that present systems are designed to bring suburban residents to line-haul destinations (park and ride) than to deliver ghetto residents from line-haul destinations to suburban job locations.

Urban Freight Transport

1. Almost all intracity freight transport is carried by truck.

2. Three characteristics of truck travel: (a) Trucks make up about 20 percent of urban-vehicle miles traveled. (b) Terminal costs constitute over two-thirds of urban truck travel costs. (c) Transport costs represent only about 10 percent of total cost of production plus distribution of goods in the United States.

3. Two issues for urban truck travel should be examined: (a) Does the industry minimize its private truck costs, and (b) Are there important external costs that should be considered by government.

4. Despite evidence that trucks are underutilized for line haul travel, the existence of terminal costs and logistical costs results in private costs that are minimized. (Competition would tend to generate this outcome for both common carriers and private carriers.)

5. The most important external cost is congestion. Trucks contribute more to congestion than their 20 percent of vehicle miles traveled because of their bulk and obstruction during loading and unloading.

6. Time of day pricing of external congestion would encourage higher capacity utilization rates of trucks and result in fewer vehicle miles. Trucks pay excess taxes for gasoline and other license fees, but they do not pay their full cost when congestion is considered (just as private automobile users fail to pay their full costs.)