0ptimal Levelof AutomobileDependency (A TQ Point/CounterpointExchange with PeterSamuel and Todd Litman) strangebook appeareQ,in 1.862called The Propbeciesof Mother Shipton.It setout a numberof mysteriousprophecies, including a vision of the automobileage, long before the first automobilehad beeninvented. According to Mother Shipton: "Carriageswithout horsesshall go, and accidentsfill the world with woe." \7hile Mother Shiptonturned out to be the invention of London booksellerCharles Hindley, the vision is nonethelessan extraordinaryone, especiallywith benefitof hindsight.It does not focus on the independence,richness, and choice that the auto 'We would bring, but on its social costs. have adopted the automo- bile even though we pay a staggering price for it in lives, pollution, noise, and land and resourcesconsumed. Automobility is a two- sided coin, and a mountain of social criticism, movies, Iiterary works, and technical papers has attempted to addressthe miracle and its attendant horrors. There is probably no one, in any part of the world that has not been profoundly affected by the automobile has an opinion about its proper role. How much automobility and '$fhat is enough? How much is too much? should we do to get the right mix? These simple questions raise very difficult philosophical, social, and economic questions-more widely ranging than a con- ventional Transp ortation Quarteily article. PeterSamuel To address these questions, we decided to try something new: we invited two thoughtful observers-Peter Samuel, publisher of Toll Roads Newsletter and Todd Litman of the Victoria Transport Policy Institute-to share their views in a Point/Counterpoint exchange.Both agreed to a seriesof questions and a processfor interacting on them. The resulting exchange is reported here''We wish to thank both contributors for their cooperativeness and their insights. 'We believe that this format is an effective way to give you valu- able perspective on complex matters of this sort. What do you think 'We of this approach? invite your comments on this Point/Counter- point feature and your suggestions on other issues where this Todd Litman approach might be useful. Transporta.tionQuarteily, Vol. 55, No' 1, Winter 2001 (5-3?l - O 2001 Eno TransportationFoundation, Inc., Washington,D.C. TRANSPORTATI ON OUARTERLY TQ: Is automobile useexcessiue in tbe and environmental impacts. These benefits U.S.?Are ue too automobile are often overlooked when parking decisions are made. Our current transportation dependent?If so,uhy? market provides the equivalent of matching grants Litnan: Considerable research indicates that for driving. The reforms we are discussing a significant portion of automobile use reduce such grants or allow them to be results from market distortions rather than applied to other modes. true consumerpreference.l In a more optimal Many market distortions represent older transportation market consumers would social objectives and technologies.Under- drive less than they do now and be better off pricing may have made sense during the overall as a result.' Our research suggests early years of the automobile age to take that personal automobile use could probably advantage of economies of scale in vehicle decline by 30% or even more if all trans- and road production. In the 1920s and portation and land use market distortions 1930s, your costs of owning and driving an were corrected. automobile declined as your neighbors' A properly functioning market reflects mileage increased.Free roads and parking consumer choice, competition, cost-based may also have been justified to minimize the pricing, and economic neutrality. Current costs and inconvenienceof collecting fees. transportation markets violate these princi- But these practices no longer make economic ples:3 Consumers have few viable travel sense now that automobile markets are choiees for many trips; many costs of driv- mature and electronic pricing greatly reduces ing are either fixed or external; and land use transaction costs, and transportation investment practices Some people are skeptical. They ask, "If tend to favor automobile travel over other driving provides benefits, how can reduced modes. driving increase benefits?" The answer is that Individually these distortions may seem a more optimal market gives consumers modest and justified. For example, free park- more of the savings that result when they ing is convenient and tax exempt, so busi- drive less. Consumers only reduce their driv- nessesconsider it a cost-effective way to ing when they are better off overall, that is, attract customers and reward employees. when they value the additional savings more Local governments often require generous than a particular mile of driving. amounts of off-street parking to avoid park- This is illustrated in Figure 1. When you ing spillover problems. But free parkjng make a transportation decision that reduces underprices driving which "leverages" in- automobile use (for example, by riding tran- creased vehicle traffic. As a result, free park- sit, cycling, telecommuting, or simply using a ing not only increasesparking costs, it also closer destination), you reduce congestion, exacerbatestraffic congestion, roadway ex- parking costs, crash risk, and environmental penses,crashes, and environmental impacts. impacts. But such benefits are currently dis- Businesses and city officials often ignore persed throughout the economy. Your neigh- these indirect impacts when making deci- bors benefit from your actions as much as sions about parking prices and regulations. you do. An optimal market returns more of To put this another way, correcting mar- thesebenefits directly to you, increasingyour ket distortions provides multiple benefits. incentive to choose the most efficient travel For example, charging motorists directly for option for each trip. You would not give up the parking they use not only reduces park- all driving, but you would probably reduce ing costs, it also reduces traffic problems some car travel to take advantage of these such as congestion, roadway costs, crashes, additional savings, just as many consumers 6 OPTIMALLEVEL OF AUTOMOBILE DEPENDENCY FIGURE 1: Optimal MarketsReturn More Samuel: Only by assigning a huge array of Benefitsof ReducedDriving to Individual external costs to the use of the private auto- Consumers mobile is it possible to conclude that there would be 30'/" less motoring in a better- arranged market for transportation. Those kinds of calculations have been shown to Parking, include: Crashes,Pollution, etc. (1) double-counting of crash costs that in ., factfall on motorists akeady, albeit often Through in an imperfect fashion (2) attribution of a large proportion of the In currentmarkets, when motorlstsreduce U.S. defensebudget to motoring, when in (for theirvehicle travel example,by riding fact U.S. defenseforces are maintained transitor telecommuting),they providebene- fot alarge arcay of reasons unrelated to fitsthat are widely dispersed through society. the defenseof imported oil-support of NAIO, containment of North Korea and China, periodic peacekeeping interven- tions, and the capability to respond to unpredictable challenges that may arise more rapidly than the ability of the U.S. to reconstitute its forces (3) very high-proposed levies on motorists for quite uncertain health damages from tailpipe emissions In a more optimalmarket, benefits are In addition it makes no senseto propose returnedto individualmotorists. This gives loading onto market prices some theoretical consumersan incentiveto use alternatives when they are more cost effectiveoverall. estimate of external costs without making a corresponding calculation of social benefits. This kind of theory surely is seeking to adjust respond to retail store sales and discount market prices with the net of social costs ver- coupons. sus social benefits, and it is one-sided in the Market distortions tend to be unfair and extreme to list and calculate only external harmful to people who are transportation costs of motoring and propose that they disadvantaged.They result in cross-subsi- alone be loaded onto motoring via raxesor dies from households that drive less than price controls. The road and car lobbies can average to those that drive more than aver- produce corresponding extc,rn'al benefit age, and reduce travel choices for non-driv- accounts that are similarly arguable, and ers. Market distortions also reduce econom- which run up equally large numbers to the ic productivity by increasing indirect and external costs that Litman cites. external cost burdens.aInternational studies We can agree in principle that market dis- indicate that regions with balanced trans- tortions are bad, but we probably disagree portation are more economically competi- about the nature of those distortions. tive.s If properly implemented, transporta- tion market reforms can increaseequity and Litrnan: Samuel has clearly not read rhe stimulate economic develooment.. material he is criticizing. He claims incor- TRANSPORTATI ONOUARTERLY rectly that the reforms I propose consist pri- Existing taxi services and municipally pro- marily of internalizing non-market external- vided bus and rail transit are heavily protect- ities. In fact, most travel reductions result ed from competition by entrepreneurial from more mundane reforms: charging minivan, minibus jitney-style services.We motorists directly for parking and local road- therefore have artificially high cost public way expenditures, distance-basedinsurance transport