A Blog About Nothing » Traffic

Evidence of Free Riding

The Homo Economicus — Mon, 29 Jun 2009 05:28:31 +0000

In Economics, the term “Free Rider” refers to a situation when an individual “consumes more than their fair share of a public resource” (from Wikipedia).

I’ve found repeated evidence of Free Riding in Thanjavur:

These pictures are taken by me in the back seat of two different auto rickshaw that took me to the office at two different days. However, the differences have some similarities. Afterthe usual negotiation over the rate with the driver, I jumped into the auto-rickshaw (which was empty – just the driver and me), and then he starts driving, but makes a phone call, and suddenly he turns back and I see someone running towards us, and jumps into the rickshaw – in the front seat.

I don’t really know what economic inefficiencies this causes, but these people, ladies and gentlemen, are free riders…

Miami's I-95 Highway

The Homo Economicus — Sat, 06 Dec 2008 22:41:00 +0000

Some of the readers of my previous post about tolls efficiency have commented about a new policy in the I-95 Highway in Miami area that have more or less some similarities with my ideas about efficiency in tolls.

My loyal reader with the nickname “Anonymous” (I still don’t know if he choose that nickname or he just lack of nicknames), have commented about this. I publish his comments:

Your main point, if I understand correctly, is that there should be programs that permit people to pay MORE and get through traffic quicker. There are, however, programs that allow people to pay LESS…and get through traffic quicker. E-Z Pass (in NY, NJ, PA)..Sunpass in Florida, among others. There is a time incentive and an economic incentive (not to mention an environmental incentive since)

Another new program, recently implemented in Florida, does precisely what you describe. The 95 Express Program provides 2 lanes over a 7 mile, highly congested are of the freeway, where motorists are guaranteed an average speed of at least 50 MPH. To use these lanes, drivers can either pay a toll (which varies depending on traffic), buy and register a hybrid vehicle, or register a 3+ person carpool. While the details of this program are worth discussing (there are certain incentives to cheat) in general this does what you describe…while also encouraging people to carpool more or buy more eco-friendly cars.

So, first of all, thank you Anonymous for your comments and for your being such a loyal reader. I actually looked at some of the details of this project right at the 95 Express Website and it certainly looks interesting. However, there are some important questions to raise. For instance, the policy guarantees for those who get into the 95 express lanes that their average speed will be at least 50 MPH, and that those who are exempt of paying after registering: hybrids and 3+ car pools (motorcycles and public transportation are exempt from paying but don’t have to register), should take out their Sunpass (so that they won’t be charged automatically) and they should have a sticker given by the authorities to identify their car as “exempted from pay”. However, as soon as they enter the 95 Express the system won’t detect the Sunpass and will send an alert to the police or – as they describe in the website: “Drivers without transponders will have their license plates photographed and receive an Unpaid Toll Notice (UTN) for failing to pay a toll. Failure to resolve the UTN will result in a Uniform Traffic Citation (UTC)”.

So the question that arises is, is the police able to see every car that didn’t pay if (1) they have a sticker? and (2) if they are hybrid and/or they are a carpool of 3+ individuals? All these at 50 MPH. It sounds a bit difficult, doesn’t it? If they stop every car that goes by without paying, and it happens that everything is OK with that car, so he wasted 5 or 10 minutes of his time because of this. It doesn’t sound terrible. But how many policemen you need in the roads? Or maybe they will stop cars randomly and do an aleatory check?

So, my question is, why instead of using those cameras that they describe in the website to picture the plates, they don’t use the cameras to photograph the plate of every car and use another technology to determine how many people are in the car (maybe x-rays or another camera), and then send them the bill by mail. Through the plate they can now if the car was registered as a car pool, if it is hybrid or otherwise he will have to pay the toll… and forget about the Sunpass for this 95 Express Lane.

Thank you Anonymous for your insights!

Traffic Jams and Maximizing Tolls Profits

The Homo Economicus — Mon, 01 Dec 2008 01:50:00 +0000

Thanksgiving weekend is one of the most (if not the one) busiest travel weekend in the year in the United States. This is the main lesson I learned during the first Thanksgiving ever I spent in this country.

Together with my friend MR we drove from Providence to Philadelphia Wednesday night, before thanksgiving began. We hardly found any traffic in our way down there, and we made very good time: around 5 hours. We supposed that if we drive back on Sunday afternoon, we would make at least 10 hours because of the traffic. So Saturday was the best option. Since I wanted to get in time to catch the last train from Providence to Boston at 10pm we decided to leave around 3:30pm.

Everything was fine during the first hour. We went through New Jersey, and even made a stop to grab something to eat. However, after that stop, there was a huge traffic jam waiting for us around New York City. The traffic was because of the George Washington Bridge Toll.

Saturday Nights in New Jersey Turnpike

The toll costs $8. This is very costly for a toll. Of course, the high price should be correlated with the incentive the authorities want to create to reduce traffic in that area. That is the main idea of the expensive tolls to get into Manhattan as well.

However, they can do much better. We spent almost two hours in traffic. Two hours. I would have pay more than $8 to skip the traffic. I guess that the vast majority of the people on the road were willing to do the same. My friend told me (even before I talked about the cost of time in economic models) that his hourly wage is much more than the cost of the toll, and that he was willing to pay more to skip the traffic – even $50!

People’s time cost money – either for unemployed people (say, the minimum wage). And this is the main variable that makes people decide between many factors that have to do with time: such as the decision between labor and leisure, or fertility decisions (children cost time and money).

So, the toll system there was totally inefficient – mainly because of two reasons:
1) People were willing to pay more than $8 to avoid the traffic.
2) The excess of carbon dioxide that the cars in the traffic were emitting could have been minimized in the absence of that toll, minimizing as well the costs of the externalities of pollution.

Now, how can this be done? Israel has an interesting system of tolls in Itzhak Rabin Highway (Highway 6). There are cameras located at the entrances and exits to the highway which take pictures of the license plate of your car. Then the pictures are processed and they send you the bill by mail with the cost depending on how long was your ride in the highway, what kind of car you have (sedan or truck) and how many individuals were inside the car. The cost can be around $10 for one ride in average.

People decide to go into the highway depending on factors such as how much time they will save (the highway crosses Israel in a straight line, as opposed to other highways), the price of gasoline (you may save gasoline by using that highway), and of course the traffic.

As opposed to Highway 6 in Israel, in the George Washington Birdge toll you have to pay not only cash, but with your wasted time as well, instead of having a more intelligent system. It is a shame that the State of NY could have triplicated the money they did in tolls during this weekend if they would have send bills by mail asking for even $15.

Think about the time you spend in traffic, and how much money will you be willing to pay not to be in traffic during your whole lifetime. I assure you that your answer will depend on your (expected) hourly wage multiplied by the amount of time you expect to be in traffic. I guess that in a city such as Caracas, people would pay thousands of dollars for assuring themselves a traffic-free city. This money could be used to create more efficient roads, and probably people would be better-off… But yes, I know, this is a crazy idea.

By the way, I didn’t catch the last train on time, and I spent the night in Providence. We should have gone back the day after.

These pretzels are making me thirsty!!!

The Homo Economicus — Thu, 24 Jul 2008 07:02:00 +0000

The general equilibrium theory proves – and this is the principle of free market economy – that when each individual maximize his and only his own utility, then the economy will reach prices that will lead it to an equilibrium which is efficient. The exact terminology is “Pareto Efficiency”, which means that it is not possible for one individual in the economy to be better-off without causing any other individual to be worse-off…

Ok, so let’s be honest with all these stuff. First of all, the theory is based on very specific assumptions, which we don’t know for sure if they take place in the real world – such as assuming that our preferences are convex sets… how can I know if my preferences are a convex set? Well, actually that is not such a crazy assumption, but it does not matter now. This is not the point of this post.

The point of this blog is, that we usually meet people all the time in the streets, which are of course maximizing only and only their own utility, and totally ignoring the utility of others… and I am certain that this is not leading to any efficiency whatsoever. During the past two weeks I have experienced some of these situations, and those people are so dumb that their actions deserve to be spread around the world through my blog so that you can join me in thinking how dumb they really are…

The first situation was while driving to the Hebrew University in Agron St. in Jerusalem. There were two jeeps each on one lane, talking to each other (it seems like they were very good friends, and did not talk in a while). The street of course is two lanes wide, and there was a traffic light some meters ahead of the two jeeps. The traffic light was red, but then in turned to be green. These two individuals kept talking to each other (there were no more cars before them), while I am honking constantly behind them, letting them know that (1) the traffic light is already green and they should move on, and (2) that I am pretty upset! I was completely ignored. These guys kept talking about their wives, or their mothers (just as I did inside of my car) and just ignored me and the other cars behind of me honking. In any case, they decided to say goodbye after a minute or so of the light being green, and they accelerated in order to catch the green light. Guess what? When I reached the junction, the traffic light turned red (they actually passed in yellow). Of course, then the taxi driver behind me started yelling at me that I was not agressive enough and he blessed me by saying that I was an idiot… That also pissed me off. What was he expecting me to do?

So now that I mentioned taxi drivers, they are separate species in these kind of stories. Again, a couple of days ago, traffic light turns green, and the taxi cab does not move. That was a wider street and I could move on the side, but, why does he do that? He just doesn’t care AT ALL about what is happening behind him… He just stayed there. But this thing of stopping on a green light is common down here. Once I could not pass the traffic light because a guy who was lost stopped on the green light and asked a police woman how to keep going… a police woman! Can you believe it? Then when I got stuck in the red light because of him (he did manage to pass in yellow) I asked the same police woman: “If you give tickets for crossing on red, why don’t you give tickets for stopping on green?”… She just laughed and did not replied me.

Another story (I have lots of these). With my two friends M&M we were driving to Mount Scopus in Jerusalem, and at some point the road is only one lane wide, and everybody must pass through a small tunnel. That is exactly on the side of the Old City walls, and there is a space for buses to stop there so that they can drop their passengers. Well, this nice bus driver in front of us did not find a place to stop on the side, because there were many other buses, and he decided to stop in THE MIDDLE OF THE ROAD! He dropped all his 40 passengers, of course, no pressure, the rate of going out of the bus was like a 0.2 passengers/second, meaning a passanger every 5 seconds. He just ignored that there was a line of 30 cars behind him, and that maybe an ambulance could come by, or that there are other people in the world other than himself that can be in a rush and have to get on time to a meeting or class!!!

And this is related to the fact that people sometimes think that they are the only one in a hurry, and others in the world have things much less important to do than themselves. I can feel this specially when going to the doctor. While sitting in the waiting room (everybody made his appointment, and everybody is waiting for his number to be called), then always a guy suddenly comes to you and ask you if he can go before you because he is on a hurry, and he does not have time… What does he think? That I love to come everyday and sit on a waiting room just for fun? What does he want me to answer: “Well, actually I’d love to! I’d love to sit here for another two hours and wait, probably your life is more important than mine, so come over!”… This really annoys me. People really do think that others are less busy… why? That is probably because of the signal you are giving (or not giving) waiting in line. If you are sitting quietly without asking everybody else if you can step in before them, then you are giving a signal that you don’t care to wait, and this might be perceived as a consequence of not being busy. But, my question is why he did not think about the fact that he would be busy at that hour when making an appointment that day at that hour?

Now, a third kind of stories. Here in Israel this is very common, or at least that is how I perceive it. You are sitting in front of the bank employee, with the doctor, with the income tax office employee or even with a lecturer (meaning that you already waited in line, and it is your turn) and then, suddenly, a third person comes along, and start talking and asking questions to the person who is receiving you. It can be in person (such as other bank employees that come and talk to the employee you are sitting with to ask him about how to do this and how to do that) or it can be by the phone (the personal phone of these people rings). So, when this happens I am expecting that they will say to their peers or other people: “Hold on sir, I am with a customer”… But no! They answer them and keep talking, and even on the phone! Can you believe it? I am just sitting there as an idiot, and these guys are talking to other people… I think this does not appear to be that annoying, but let me exemplify it. I went to arrange some things at the income tax office (this is a story by its own, coming soon) and I waited in line and I sat in front of the lady who received me. Then, I start explaining her what do I need, and she starts seeing my stuff, and it appears that I was missing one small document. Then she receives a call in her cell phone, god knows from who, but it seems like it was family or something, and she started checking this person’s details on the computer (she asked him for his ID number and started to answer questions about income tax). So, I then thought to myself, what is this lady doing? Tell your cousin or your mother (I was thinking about her mother as well inside of my head) to come, wait in line and do their stuff just like I did… or if you want to help them, don’t be so insolent, and do that after working hours, or when you are not receiving anyone else. Then I could not stand it and I asked her: “Lady, are you with me or what?”, and she started screaming at me: “Wait sir, you don’t have all your documents, and I am working, this phone call is work”… of course is work, that is exactly my complain, work, but only with people in front of you, and not with your family that is calling you to give them a hand without coming over here. Of course I shut up, and waited, like an idiot.

But these people get pretty upset when you complain about these things. Also, once in the bank I wa
s waiting in line, and there were lots of people, and I was called and it seems like the manager was also receiving people in line to help her piers. So I sat with her, and as expected, every 2 minutes another employee of the bank came and ask her what to do, how to do it, when to do it, etc. I also told her: “I am sorry, but why can’t you concentrate on me for a second, I feel it is disrespectful”… Well, she did not scream, but she told me: “Look, I do not receive people usually, and I am making you a favor that I received you now…”. Why does she think she was making me a favor? Maybe she is making a favor to the other employees, but not to me. I would have prefer sitting with anybody that can do my stuff without interrupting me every 2 minutes. Moreover, if she knows that she has to assist her staff constantly, why did she start to receive people from the beginning?

In sum, these are the things in life that make you think, what the hell are they teaching me at school? Here everybody is trying to maximize his utility and, no way, this is not efficiency. But what I have learned, and sadly I agree, that in these situations one can only take a deep breath and say to yourself: “These pretzels are making me thirsty!!!”