To T or not to T

Robert Cervero and I recently published a piece in the Journal of Public Works Management & Policy where we make some back-of-the envelope estimations of the costs and benefits of rail projects in American cities. The article responds to another by Peter Gordon and Paige Elise Kolesar at USC and the University of Michigan. Lisa Schweitzer, also at USC, provides a concise and well-written summary of the two articles.

While I generally enjoyed her summary, I was a bit disappointed by the following: “Among all the issues raised in these notes, perhaps the most nettling concerns Guerra and Cervero’s question: What is the counterfactual? They unfortunately settle for the usual bogeymen—clogged highways and the looming threat of expensive energy.”

If there are any cost-benefit “bogeymen” out there, they are the high costs of providing similar levels of transit service by bus in large American cities and the loss of consumer surplus. Congestion plays a rather small role in our calculations. For Los Angeles, a city of much interest given its size, congestion, and transit investment plans, our estimation of the congestion-related benefits of rail are less than a tenth of Winston and Maheshri’s. As a recent and compelling article (forthcoming in AER) has found again: you can’t build your way out of traffic congestion…by highway or by rail.

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