Sunday, February 28, 2010

Let's subsidize bad choices - and then tax them!

Matt Yglesias talks about the best way to discourage people from eating junk food. Tyler Cowan says that taxing junk food is more effective than subsidizing healthy food. As Yglesias points out, these taxes are essentially undoing a subsidy for junk food, and we could just eliminate the subsidy:
Of course as a first step in an ideal world we’d reduce our spending on agricultural programs that subsidize production/consumption of unhealthy foods, a crazy policy initiative supported by nobody except all the relevant members of congress.

Speaking of sugar, this is the same argument I made in my post about sticks, carrots and sugarlumps in Hasselt, Belgium:
And really, that's what entitlement is, right? You get so used to the reward that when it's taken away it feels like a punishment. ... What seems to have been the deciding factor is that the people of the area created a consensus Mobility Plan together, and seem to have really taken ownership of it; Olsen writes, "Now, people in Hasselt often speak of "their" bus system, and with good reason."

Similarly, subsidizing the price of transit increases overall travel without changing the mode share, and charging people to drive just counteracts the subsidies placed on it. As I wrote in my post about the G train and the Kosciuszko Bridge, subsidizing the G train will be ineffective as long as the State subsidizes the BQE.


Alon Levy said...

I don't know how highway subsidies affect transit ridership exactly in New York, but in Chicago they have a clear but not huge negative effect. Metra's magazine documents how following the reconstruction of the Dan Ryan Expressway in 2007, the two Metra lines serving the same direction had ridership declines in 2008, while all other lines saw ridership increases.

Cap'n Transit said...

Thanks, Alon! Very helpful. It would certainly be nice if the MTA (or, say, a local 501(c)3 nonprofit) did studies like this.

Unknown said...

The Legacy Highway has had a very similar effect on Utah's brand new commuter rail system. The rail opened first, but ridership is down by about half since the new highway opened. (The two corridors directly parallel one another.)