Some Arithmetic on the Cost of NYC Traffic Congestion
The Times is reporting that NYC will receive roughly $350 million federal dollars to address congestion. The article is vague about what is the "treatment" and how it could "cause" a reduction in congestion. But, let's ignore this detail! Given that time is our most scarce asset (except for bloggers and blog readers), what is congestion costing NYC?
“The average New York commuter now spends 49 hours stuck in traffic every year, up from 18 hours in 1982,” she said. “While some may be content to accept growing gridlock as a way of life, Mayor Bloomberg is not going to let traffic rob the Big Apple.
I will never understand how the Texas Transport Institute generates these numbers but let's take them seriously.
So the average commuter faces 31 hours more of commuting in NYC than in 1982. Suppose that there are 4 million commuters and the average after tax hourly wage is $15.
Aggregate willingness to pay to return to 1982 (ignoring guys who have lost their hair and their willingness to pay for that scarce commodity) = $1.9 billion or roughly $500 a commuter per year.
In this age of IPODs and blackberries, cool cars, and good sound systems in cars, is the cost of commuting really $15 an hour? I recognize that if your kid is sick and you need to get home quick, you'd be willing to pay a great deal to have a short commute that day.
New York City has experienced job decentralization and thus with many job centers there are suburban residential communities with close access to work. In a diverse society, there will be self selection --- those who don't mind commuting will live further from work.
So, I still wonder what is the real cost of big city congestion in a world where people can get things done while commuting and those who hate commuting have the choice of living closer to work. Perhaps an equity argument can be made that the lower middle class are "stuck in traffic" without fun toys to play with and not able to afford housing close to work. But, we then get into a question of what price per hour of their time do we use to translate the 31 hours (listed above) into a $ cost of congestion?
“The average New York commuter now spends 49 hours stuck in traffic every year, up from 18 hours in 1982,” she said. “While some may be content to accept growing gridlock as a way of life, Mayor Bloomberg is not going to let traffic rob the Big Apple.
I will never understand how the Texas Transport Institute generates these numbers but let's take them seriously.
So the average commuter faces 31 hours more of commuting in NYC than in 1982. Suppose that there are 4 million commuters and the average after tax hourly wage is $15.
Aggregate willingness to pay to return to 1982 (ignoring guys who have lost their hair and their willingness to pay for that scarce commodity) = $1.9 billion or roughly $500 a commuter per year.
In this age of IPODs and blackberries, cool cars, and good sound systems in cars, is the cost of commuting really $15 an hour? I recognize that if your kid is sick and you need to get home quick, you'd be willing to pay a great deal to have a short commute that day.
New York City has experienced job decentralization and thus with many job centers there are suburban residential communities with close access to work. In a diverse society, there will be self selection --- those who don't mind commuting will live further from work.
So, I still wonder what is the real cost of big city congestion in a world where people can get things done while commuting and those who hate commuting have the choice of living closer to work. Perhaps an equity argument can be made that the lower middle class are "stuck in traffic" without fun toys to play with and not able to afford housing close to work. But, we then get into a question of what price per hour of their time do we use to translate the 31 hours (listed above) into a $ cost of congestion?
posted by Matthew E. Kahn at 12:24 PM
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