FTFY

I came across this Freakonomics blog post via the Saint Louis Urban Workshop, and had to mark it up. Many of the corrections I make were pointed out in the comments to the article, but it's been ten days and Morris hasn't yet responded. Can't the Times hire an economist who's willing to actually look at the data and talk to people on the ground, instead of cherry-picking whatever figures and quotes support his professor's preconceived notions?

When does transit fare policy treat people unequally? When it treats them exactly the same.

Why?

At thea huge risk of overgeneralization, there are two major constituencies for mass transit. First are wealthier workers who commute to jobs in city centers where parking is expensive. The Another group consists of the very poor. Unlike the “choice riders,” who could drive if necessary, low-income “captive” riders often have no other option. In many cities, there are middle-income riders who could afford a car but have chosen not to own one, committing themselves to the transit system indefinitely. There is no good name for them, because people like me would prefer to pretend that everyone really wants to drive. Let's call them "committed" riders.

The two groups have very different travel behaviors. For example, they favor different modes. As of 2001, the wealthy were much more likely to ride commuter rail or heavy rail (e.g. most subways) than bus or light rail; those earning over $100,000 took twice as many trips on the former modes as on the latter. For the poor, it is just the opposite. Members of households with incomes under $20,000 were almost six times more likely to take bus or light rail trips than heavy or commuter rail ones. I don't know what the middle class do, because I just assume that they want to drive drive drive like me.

The wealthy also travel longer distances. Those bus and light rail trips favored by the poor averaged only 6.8 miles, while the heavy rail and commuter rail trips preferred by the wealthy averaged 8.7 and 22.1 miles respectively. If you focus on the New York Subway, however, the poor tend to travel further than the middle-class or wealthy.

Since they are largely commuters, the wealthier tend to travel during the peak periods (the weekday morning and evening rush hours) and in peak directions (inbound in the morning, outbound in the evening). The poor, and the middle-class "committed" riders, who rely on transit for a wider variety of travel, take trips in more varied directions and are much more likely to travel at off-peak times.

What does this add up to? In pretty much every respect, the trips of the wealthier impose heavier costs on the system than the trips of the poor and middle class.

Bus service isseems to be cheaper to provide than rail service, but if I'd done my homework I'd know that it was actually the other way around. Short trips are obviously less expensive to accommodate than longer ones.

And even though vehicle occupancy is much higher during the peaks, on a per-rider basis it is still cheaper for transit agencies to provide service at off-peak times and in off-peak directions. This is because accommodating rush-hour traffic means purchasing extra vehicles and hiring extra staff which will be underused at midday, at night, and on the weekends. It also means problems with trips like reverse commutes; for example, commuter trains often travel outbound during the morning peak and inbound during the evening nearly empty.

Yet despite the very different burdens different types of trips impose on the system, most transit agencies prefer the simplicity of flat fares, regardless of time of day, day of week, mode, distance, or other forms of costs imposed (excepting, to a degreelargely but not completely, commuter rail service, which I just said was the preferred mode of the "choice" commuter).

This is why it was with considerable happiness that clueless Angelenos like Professor Brian Taylor and I read this article announcing that the New York MTA is considering cutting subway fares during off-peak times, as they have done for many years with commuter rail fares. Brian is my mentor at UCLA and is an outspoken advocate for equity in transportation; after seeing this piece he wrote me that “you would be hard-pressed to find anyone in the country more excited by this article!”

What has Brian so giddy? This policy would be progressive in that it would benefit poorer and middle-class riders who disproportionately travel at off-peak times. It would also be equitable in that it would reflect the lower costs those riders impose on the system. This would help equalize the subsidy each passenger receives.

And in addition to being more fair, this policy would be more economically efficient. By using price signals to increase demand at off-peak times, it would put underused staff and equipment to work.

Consider that transit vehicles can be packed during the peaks but are decidedly light on traffic much of the time; economists Clifford Winston and Chad Shirley calculated that as of the mid-1990’s rail vehicles ran only 20 percent full. This figure has probably risen considerably since then, but I won't bother to spend half an hour to check it using the freely available data, because it suits my argument, being so low. Yet there is usuallysometimes no flexible pricing mechanism to fill those seats. Compare this with the commercial airlines, which are continually (perhaps maddeningly) adjusting prices to be sure every seat is occupied, and which have succeeded 81 percent of the time this year.

Unfortunately, for the moment new MTA chairman J.H. Walder is ruling out fares that are higher for longer trips, but this would be the logical next step. As with time-sensitive fares, this would appear to an academic in LA to combine greater equity with improved economic efficiency, while actually being regressive since it only applies to the subway system. Distance-based fares sound confusing and logistically difficult, but they need not be: the San Francisco Bay Area and Washington (which also offers an off-peak discount) already charge fares based on distance without any major problems, and in fact, so do the commuter railroads in New York, which pretty much wipes out my argument here.

But for now, off-peak discounts are definitely a step in the right direction. In a world where economic efficiency and social equity are often at loggerheads, this policy promisesappears to increase both. Let’s hope the new ideas will represent more than a (sorry) token effort.

This post is particularly frustrating because we sorely need good economic reporting on transit by knowledgeable people. Let's hope that next time Eric Morris and Brian Taylor actually run their ideas by people who live in the city they're, ahem, studying - and where the newspaper that employs them is based.