Social Cost Accounting of Private Autos and Public Transit

If we get the prices right, will more people use transit?

Mark A. Delucchi

“Redefining, Reevaluating & Reinventing Transit”UCLA Conference Center, Lake Arrowhead

October 14-16, 2001

First…

• The question loosely put: is travel by private auto “subsidized” more than is travel by transit?

• Different ways of doing the accounting -- e.g., “full-cost” vs. efficient pricing -- give quantitatively but not conclusively different results

Preview of results

• Generally, no matter what the accounting system or the details of the analysis, average “subsidies” to transit are at least as large as average “subsidies” to auto use

• Hence, “getting the prices right” might actually make autos more attractive

Full-cost versus efficient pricing

FULL-COST PRICING

• Identify and quantify in dollars all costs (resources, impacts) of each mode

• Set prices to recover full costs across all users

EFFICIENT PRICING

• Eliminate market imperfections where possible (results in long-run marginal cost pricing)

• If imperfections remain, use first-best alternatives (e.g., Pigovian taxes, Ramsey prices, lump-sum transfers)

Modes and cost categories

MODES

• Private gasoline autos

• Electric vehicles

• Transit Buses

• Light rail transit

• Heavy rail transit

COST CATEGORIES• Air pollution• Oil use, water pollution• Noise• Congestion• Accidents• Highway and service costs• Parking• Government subsidies

External costs and subsidies for different passenger transport modes

(cents per vehicle mile, except last row is cents per passenger mile) [Numbers in brackets are my best estimates]

Cost item Gas auto Electric autoTransit bus Light rail Heavy railAir pollution [2.0] 0.8 to 13 1.5 [20.0] 5.4 to 123 5? 5?

Oil use, water pollution [0.8] 0.3 to 1.5 0.4 [4.0] 1.5 to 8.7 1? 1?

Noise [0.2] 0.01 to 2.0 0.15 [2.0] 0.5 to 10.0 1? 1?

Congestion 4.0 4.0 8.0 n.e. n.e.

Accidents 2.5 2.5 3.5 2? 2?

Marginal highway and service costs 0.1 0.1 1.5 0 0

Unpriced parking [1?] 0 to 8 [1?] 0 to 8 0 0 0

Inefficient highway user taxes andfees, meant to cover highway costs

-2.7 0 0 (exempt fromfuel taxes)

0 0

Government subsidy: operating costsminus fares, operating+rolling-stockcosts minus fares, totaloperating+capital costs minus fares

0 0 339, 398, 465

[398]

685, 1137, 2800372, 797, 1177

Extra private costs relative to gas auto 0 0 to 16 [8] see subsidy see subsidy see subsidy

Total cents per vehicle-mile [8] 5 to 28 [18] 9 to 25 359 to 620 [437]694 to 2,809 381 to 1,186

Passengers per vehicle assume 1.0 assume 1.0 11 (average) 26 (average) 22 (average)

Total cents per passenger-mile[8] 5 to 28 [18] 9 to 2533 to 57 [40]27 to 108 17 to 53

Government subsidies(cents/vehicle-mile)

Gasauto

Electricauto

Transitbus

Lightrail

Heavyrail

0.0 0.0 339,398,465*[398]

685,1137,2800*

372,797,

1177*

*Operating costs minus fares, operating+rolling stock costs minus fares, total operating+capital costs minus fares

Air pollution costs(cents/vehicle-mile)

Gasauto

Electricauto

Transitbus

Lightrail

Heavyrail

0.8 to13

[2.0]

1.5 5.4 to123

[20]

5? 5?

Oil-use and water-pollution costs(cents/vehicle-mile)

Gasauto

Electricauto

Transitbus

Lightrail

Heavyrail

0.3 to1.5

[0.8]

0.4 1.5 to8.7

[4.0]

1? 1?

Noise costs(cents/vehicle-mile)

Gasauto

Electricauto

Transitbus

Lightrail

Heavyrail

0.01 to2.0

[0.2]

0.15 0.5 to10

[2.0]

1? 1?

Congestion costs(cents/vehicle-mile)

Gasauto

Electricauto

Transitbus

Lightrail

Heavyrail

4.0 4.0 8.0 n.e. n.e.

Note: congestion charges may cover infrastructure costs

Accident costs(cents/vehicle-mile)

Gasauto

Electricauto

Transitbus

Lightrail

Heavyrail

2.5 2.5 3.5 2? 2?

Marginal highway, service costs(cents/vehicle-mile)

Gasauto

Electricauto

Transitbus

Lightrail

Heavyrail

0.1 0.1 1.5 0.0 0.0

These are maintenance and service costs, not capital costs

Unpriced parking costs(cents/vehicle-mile)

Gasauto

Electricauto

Transitbus

Lightrail

Heavyrail

0 to 8

[1?]

0 to 8

[1?]

0 0 0

Inefficient highway user fees(cents/vehicle-mile)

Gasauto

Electricauto

Transitbus

Lightrail

Heavyrail

-2.7 0.0 0.0* 0.0 0.0

*Exempt from fuel tax

Extra private costs(cents/vehicle-mile)

Gasauto

Electricauto

Transitbus

Lightrail

Heavyrail

0 0 to 16

[8]

seesubsidy

seesubsidy

seesubsidy

Total “subsidies” per vehicle-mi(cents/vehicle-mile)

Gasauto

Electricauto

Transitbus

Lightrail

Heavyrail

5 to 28

[8]

9 to 25

[18]

359 to620[437]

694 to2,809

381 to1,186

Total “subsidies” per person-mi(cents/passenger-mile)

Gasauto

Electricauto

Transitbus

Lightrail

Heavyrail

5 to 28

[8]

9 to 25

[18]

33 to 56

[40]

27 to108

17 to 54

1 ppv 1 ppv 11 ppv 26 ppv 22 ppv

ppv = persons per vehicle (average data)

Conclusion

• Full-cost pricing or efficient pricing of all modes is not likely to get people out of cars, and may in fact get people into cars

• Of course, it is possible to set prices to get people out of their cars; however, prices that do this generally won’t be full-cost or efficient

• These findings are limited: they don’t tell us about the efficiency of transit in any particular market, and don’t say much about the importance or desirability of transit (or pricing) in general