Austin Contrarian

$160 per trip

That's the social cost that Charles Kamonoff, an NYC environmental/transportation analysist, believes each driver who enters Manhattan's central business district imposes on other drivers.  Via Felix Salmon: 

After crunching the numbers, he calculates that on a weekday, the average car driven into Manhattan south of 60th Street causes a total of 3.26 hours of delays to everybody else. (At weekends, the equivalent number is just over 2 hours.) No one car is likely to suffer excess delays of more than a few seconds, of course, but if you add up all those seconds for the thousands of affected cars and trucks, it comes to a significant amount of time.

Many of those hours are very valuable things, especially when you consider big trucks, staffed with two or three professionals, just idling in traffic. Komanoff calculates (check out the “Value of Time” tab) that the average vehicle has 1.97 people in it, and that the average value of an hour of saved vehicle time south of 60th Street in Manhattan on a weekday is $48.89. Which means, basically, that driving a car into Manhattan on a weekday causes about $160 of negative externalities to everybody else.

I can't vouch for Komanoff's numbers or his methodology. Given the sheer complexity of the traffic dynamics in Manhattan -- which are much more complicated than the traffic dynamics of a single highway -- I would treat his estimate skeptically.

That said, his estimate doesn't seem outrageously high to me. The basic point is sound:  we severely underestimate how many people we delay when we enter a congested network of roads.  If you've ever tried to make the trip crosstown Manhattan in the middle of the day, you understand just how much delay one driver can cause.

Komanoff recommends congestion pricing.  A good idea.  But he also proposes making buses free, which is a bad idea (and one floated in Austin occasionally). 

One problem is that a free bus would be a magnet for the homeless looking for a cool place to hang out.  That sounds callous, I know, and perhaps it is, but in that case you'd never see a large switch from cars to buses, so what would be the point?

The other problem is that both bus and rail can be congested, too.  If you've ever taken a packed No. 3 around ACL, you understand this perfectly well.  There is a cost to standing up on a jerky bus for 20 minutes, squeezed in among a bunch of strangers who may or may not practice good hygiene.  This is a genuine cost of congestion.  In fact, it is probably too high a cost for most of the drivers around here, who would much rather be stuck in traffic in a cool, comfortable car.

If we price roads but not buses or trains, then the buses or trains will be too crowded (at least in Manhattan and DC, if not in Austin) and we simply will have shifted the cost of externalities from drivers to bus and train riders.  This certainly does not mean that buses and trains must pay their own way.  But it does mean pricing them with the interests of both drivers and non-drivers in mind.

Skilled cities

Ed Glaeser and Matthew Resseger have a new paper out examining how worker productivity varies with city size.  They find that workers in skilled cities become more productive as the cities grow; workers in less skilled cities do not:

There is a strong connection between per worker productivity and metropolitan area population, which is commonly interpreted as evidence for the existence of agglomeration economies.  This correlation is particularly strong in cities with higher levels of skill and virtually non-existent in less skilled metropolitan areas.  This fact is particularly compatible with the view that urban density is important because proximity spreads knowledge, which either makes workers more skilled or entrepreneurs more productive.  Bigger cities certainly attract more skilled workers, and there is some evidence suggesting that human capital accumulates more quickly in urban areas.

No one is quite sure exactly why (skilled) city growth makes workers more productive (Glaeser and Resseger included).  One theory is that workers learn more quickly from one another in larger cities; there is more trade-specific information "in the air."  For example,  software engineers and musicians develop their skills more quickly in a city with lots of software engineers and musicians.

The other theory is that a large city has a deeper pool of entrepreneurs and others with "high human capital" (i.e., smart, creative people).  It generates more innovations, which make the city's population more productive, which attracts more workers, who generate more innovation, etc. (This one better matches Jane Jacobs’ theory.)

These are genuinely different explanations. If the first is accurate, then workers’ pay should rise more steeply with experience in large, skilled cities than in small, skilled cities.  The second is a sort of “creative destruction” theory; it means that workers in large, skilled cities face a higher risk of being displaced by the latest innovation.  I think both are true, which (partly) explains why big cities attract some highly skilled people while repelling others.

What does blogging crowd out?

Matthew Kahn wonders whether blog reading crowds out book reading.  He believes there are two types of blog readers:  the nerdy "Wikipedia" types who like variety and suffer from slight attention deficit order, and the "deep readers" who want to dig deep in a few subjects.  He speculates that books are substitutes for the Wikipedia nerds and complements for the deep readers.

I read more books since I've started reading blogs.  I don't buy more books, but I read more of the books I do buy.  I've always bought books on impulse but then let them sit on a shelf.  The real reason I read more books now, I think, is that I blog myself.  Books stimulate ideas for new posts, of course.  But, more importantly, I can only say the same thing a few times without getting bored.  I long ago exhausted my own stock of ideas so I have to rip off others'.  

What does my blogging crowd out?  Baseball.  Football.  I used to watch two or three baseball games a week.  I don't anymore.

Some TV, but, honestly, not that much.  My prime TV watching time has always started at 10 pm with the Simpsons.   I used to watch TV before 10, but I can't really remember what I watched, so I guess I'm watching TV more "efficiently."

Blogging crowds out some work.  I used to hustle harder for new business when I was slow.  I haven't sat down to estimate my lost earnings from blogging -- that might make me quit (blogging, that is, not work).  Still, work is work; there hasn't been too much to take from there.

I think my blogging has mostly crowded out dead time.  I don't know whether I used to just sit around staring blankly at a wall or what, but when I do the math, the time I spend on blogging and reading exceeds -- by a lot -- the time I used to spend on activities since crowded out.

City growth

The Census Bureau has released its July 1, 2008 city population estimates.  Note that Texas has three of the largest eight (Houston, San Antonio and Dallas) and six of the largest 21 (add Austin, Fort Worth and El Paso).  Houston now trails Chicago by just 600,000, a gap that Houston could close within 20 years if the last decade's growth rates hold.  This is a surprising statistic as long as one ignores metropolitan populations, which are what really count when calculating a city's heft.  Chicago's metro population is still much larger than Dallas and Houston's, which are probably now the fourth and fifith largest metro areas.  And, in general, Texas cities have large boundaries and aggressively annex surrounding areas, which partly accounts for their rapid growth.

What's going on with Fort Worth? It had the fastest growth of the top 25, both between 2007 and 2008 (3.6%) and between 2000 and 2008 (29%).  No other city in the top 25 was close; Charlotte and Phoenix were the closest at 21% and 18%, respectively.  Fort Worth has grown twice as fast as Austin since 2000.  I haven't heard much about Fort Worth's explosive growth.  Strange.

One surprise on the other end:  Philadelphia contracted at a faster rate than Detroit between 2000 and 2008.

The most noteworthy fact here may be that, as the WSJ points out, central cities did very well between July 1, 2007 and July 1, 2008.  

The central-city population in U.S. metropolitan areas with more than one million people (excluding New Orleans) grew at an annual rate of 0.97% between July 2007 and July 2008, compared with a growth rate of 0.90% in 2006-2007, and growth rates around 0.5% in the years between 2002 and 2005.  By contrast, U.S. suburbs in metro areas greater than 1 million people grew at a 1.11% annual rate in 2007-2008, down from growth rates between 1.29% and 1.48% between 2002 and 2005.  Central cities are closing the gap.

The WSJ attributes the shift in growth rates to the recession.  We have a short memory.  2007 was the year of the historic spike in gas prices.  Central cities -- especially older, monocentric cities like Chicago -- began to look a lot more attractive to commuters.  I imagine this played a much bigger role than the nascent recession.   

Why we don't need TxDOT's central planning

Tory Gattis agrees with me that Perry's veto of the so-called "smart growth" bill was a good idea.

Tory, however, disagrees with me on one point:  he thinks TxDOT's control over infrastructure in metropolitan areas is basically a good thing.  Tory's point is that our highway system is a network that connects places and therefore needs a "master architect" rather than cities going their own way.   Without some form of central control, we'd get NIMBYism run amok and be stuck with the equivalent of planned communities' cul-de-sacs rather than the connectivity of street grids.

I don't think this is right, as long as infrastructure decisions are made at the metropolitan level.   Left to themselves, individual cities might indeed seek to shift infrastructure to neighboring cities, which would set off a battle of NIMBYs. But metropolitan areas want to be connected to other metropolitan areas.  Their citizens want to be able to get places and good connections are essential to a city's economy.   As long as metropolitan areas have control over their roads, they'll have the power to curb NIMBYism.

The better analogy is downtown Houston's tunnels.  Developers have linked their office buildings to the tunnel network without central planning.  They could have shorted the network by scrimping on their own infrastructure -- by building very narrow tunnels, for example -- but they haven't; later additions have matched the quality of the earlier ones.  (Or "had" as of the mid-1990s.  I confess I haven't been in the tunnels in 14 or 15 years.)

Local control works just fine as long as we use the right definition of "local."  

McBlogger, I don't get it

McBlogger and I disagree down the line on tolls.

I understand his and many others' opposition to tolling existing, free roads and to the privatization of our highways, but these arguments against tolling new roads just don't make any sense:

Telling people not to use toll roads if they don't want to and then building them is almost like telling people not to breathe if they don't want to. They are going to be hurt.

Why? Because we all will be paying toll road TAXES even if we "don't use them".

How? We will pay the extra tolls at the cash register when we purchase goods and services because businesses will divert their toll costs onto the consumer. It's common-sense.

I don't think it's commonsense at all.  Commonsense tells us that businesses won't incur costs for new toll roads.  At worst, no one will use the toll roads, and businesses will face exactly the same costs as before.  New roads can hurt existing businesses by blocking access or diverting customers to other, now more convenient locations.  But this is a side effect of new roads, too, and it isn't McBlogger's complaint anyway.

In addition, toll roads are long-term debts that our children's grandchildren will continue to pay.

True, if the tolls don't cover all of the long-term debt.  But free roads incur larger long-term debt because the public has to cover all of the cost.  If we're worried about our great-grandchildren, we should toll all roads.

Lastly, if you think toll roads are the panacea for all our roadway, traffic and pollution ills, you are grossly mistaken. Just look at the long-time toll roads in tolling meccas like CA, NY, FL, etc., and you will see that not only do they still have the same issues and problems, but new ones have been created directly due to the building and maintenance of toll roads and plazas.

Toll roads don't have to be a panacea for congestion and pollution; they just have to be better than free roads.  They are. 

He also complains about the use of Eminent Domain and providing "wealthy special interests" more avenues for profiting at our expense.  But Eminent Domain is a problem with free roads, too.

 I assume "wealthy special interests" means private consortiums like Cintra-Zachry.  But this is an objection to road privatization, not tolls.  And free roads benefit "wealthy special interests," too -- property owners who benefit from better access.

In the long run, property owners capture all of the benefits of free roads.  Tolls shrink that benefit.  So what's the problem?

The FTC goes after blogger endorsements

The Federal Trade Commission intends to make bloggers who endorse a product disclose freebies they receive from the product's seller.  Seriously.

The existing regulations require those endorsing a product for an advertisement to disclose a connection with the product's seller "that might materially affect the weight or credibility of the endorsement."  Being paid to endorse a product, the FTC believes, is a fact that "might materially affect" the endorsement's weight or credibility -- unless the endorser is a celebrity, whom everyone assumes is being compensated.   

But since "might materially affect the weight or credibility" is a mushy standard that could mean anything, the FTC has to use examples to show what it means.  And it intends to add paid blogger endorsements to its little menagerie of examples (FTC report pp. 84-85 (pdf)):    

Example 7.  A college student who has earned a reputation as a video game expert maintains a personal weblog or “blog” where he posts entries about his gaming experiences. Readers of his blog frequently seek his opinions about video game hardware and software. As it has done in the past, the manufacturer of a newly released video game system sends the student a free copy of the system and asks him to write about it on his blog. He tests the new gaming system and writes a favorable review. The readers of his blog are unlikely to expect that he has received the video game system free of charge in exchange for his review of the product, and given the value of the video game system, this fact would likely materially affect the credibility they attach to his endorsement. Accordingly, the blogger should clearly and conspicuously disclose that he received the gaming system free of charge.

I don't know who tipped off the FTC attorneys to the blogosphere's existence, or what impelled him to do it, but he should be ashamed of himself.  Who was raising the hue and cry over blogger endorsements?  Who thought it was a good idea to sic an agency obsessed with balding treatments and miracle vitamins on the internet? 

Anyway, the damage is done.  The FTC attorneys have concluded that readers of these quirky and newfangled "weblogs" are entitled to the same protection from undisclosed endorsements that it guarantees TV viewers exposed to weight-loss and vitamin-supplement ads.

This is a silly regulation for many reasons.  First, the FTC can't effectively enforce its rules now for MSM advertisers.  There are just too many outlets (TV, newspapers, magazines, radio) and too many advertisers creatively gaming the rules.  The FTC can't even control specific industries.  It has been battling weight-loss and vitamin-supplement advertisers for decades.  Everyone operates at the laws' fringes; the FTC makes a rule, the weight-loss people figure out a loophole, and so on.  And so late night TV is filled with ads for all kinds of flaky weight-loss treatments.

Because the FTC struggles to regulate a few thousand MSM outlets, it has no chance of enforcing its rules among millions of blogs.  No chance at all.  Bloggers will be able to do what they want, confident in the anonymity provided by numbers.

And, second, even if the FTC could be a credible enforcer, why should it be?  I seriously doubt it will improve the reliability of blog product endorsements.  That ought to be the goal -- to improve the quality of the information floating around out there.  An undisclosed "material connection" perhaps sometimes reduces the value of the endorsement to readers. But lots of other things impair the value of endorsements.  The blogger might be an idiot, for example.  Or the blogger, while not an idiot, has bizarre, undisclosed fetishes which might make his experience just a mite atypical.  The blogger might not have done his homework on the product because he was lazy.  Or he endorsed the product because all the cool people were doing so.  In each case, the reader is likeliest to get the best information from the blogger who got the freebie.  

Third, the few, good bloggers who do provide useful information don't need regulations like this.  These are widely-read bloggers who have been around long enough to build up credibility with their readers.  Few would want to risk that credibility by failing to disclose something their readers would expect them to disclose.  And their readers might expect them to disclose a free book, meal or video game system.  Or they might simply assume the freebies and shrug.  For example, I assume Matt Yglesias and Tyler Cowen get free review copies of the books they review.  I don't believe that either will take the edge off a bad review merely because they got the book for free.  

Fourth, Google can fix any harm posed by a "tainted" endorsement in 200 milliseconds.  When deciding which video game system to buy, I can pull up my local bloggers' review,  but I can pull up a dozen others in just seconds, as well as discussion boards and professional product reviews.  There have been several widely-followed econ bloggers talking up the Kindle.  I suspect many of them got their Kindle gratis.  I don't know.  But when deciding whether to buy my kindle, I considered the possibility that their endorsements perhaps had an artificial glow.  But I also looked at the product review at Amazon (the 1* and 3* reviews are usually the most informative).  And I did other searches for blogs and  discussion boards devoted to the Kindle.  Acquiring information to counterbalance one compensated endorsement is virtually costless.  

These are four reasons why the regulations will either be impotent or pointless.  But here's the FTC's fundamental mistake:  it doesn't understand that readers' expectations depend on the background rules.  Under the current system, I don't know whether a given blogger is being compensated for an endorsement unless she discloses a connection.  If she doesn't disclose a connection, then I have to treat her endorsement with a bit of skepticism (although thorough, thoughtful reviews are good at dispelling this skepticism), and will continue to do so until I've developed trust in her blogging.  In an unregulated blogosphere, my default stance is skepticism.

Under the FTC regulation, if a blogger has an ironclad obligation to disclose freebies, then I'll expect him to disclose that he got a free copy of the product, and discount his endorsement appropriately.  If he does not disclose a connection, I'll assume that he's not being compensated.  Of course, he could be cheating, and we know the FTC will not have the resources to police this kind of misrepresentation.  In this case, the regulation's only consequence will have been too disarm me, to make me a little more gullible.

In a world without a credible threat of enforcement, we're better off in the first scenario than the second.  The FTC's existing rules for television have arguably made consumers more gullible.  They vaguely understand that the government requires commercials to be accurate.  But "accurate" is judged on a sliding scale; commercials make a lot of claims that are unlikely to be true but which "must" be true because the government is letting them appear on TV.  In the worst case, the FTC regulations increase the risk of deceptive and misleading blogposts by giving readers false assurances that they are not being misled.

One might argue that my concerns are overblown and that these regulations will be  harmless at worst.  But this is wrong.  They will cause blog clutter if nothing else.   Tyler's book reviews will come (I presume) with an asterisk and fine print at the bottom.  Food critics will have to run disclaimers at the bottom disclosing which meals were free and which weren't.  Clutter is irritating. 

And it will be particularly irritating to those of us who won't need to clutter our blogs because no one is sending us free stuff to endorse.  

H/t This Life in Austin

Perry vetoes smart growth bill

Did anyone know that the Texas Legislature passed a "smart growth" bill?  I first heard about it when Perry vetoed it.

The legislation merely established a working group to study and recommend a smart-growth policy, so it would have had no immediate impact on growth patterns in Texas.  But it was charged with developing a "comprehensive smart growth plan for the state to prepare for the projected population growth in the state" and addressing things like the quality of community life, the design of municipalities, counties and regions, health issues and "the encouragement of community and stakeholder collaboration in development decisions."  

It's hard to get too worked up over legislation that merely would have established an advisory committee, but I think the veto was probably a wise decision.

As framed, the working group would have been charged with creating a statewide growth policy.  Bad, bad idea.  Most of our problems today stem from vesting TxDOT, a state agency, with unfettered control over major infrastructure projects.  It is TxDOT that decides whether to build this highway or that, to direct growth in this direction rather than that, and to toll or not toll.  (I admit TxDOT's policies on the latter match my preferences better than most of its others.)  And it is TxDOT that soaks up dollars that could be used to fund rail or other modes of transportation.

Infrastructure is destiny.  Choosing which and what kind of infrastructure to build is never a value-free choice.  And, today, the most important infrastructure projects reflect the values of a state agency rather than of the local communities most affected by them. Local communities should be able to shape their own environments.

We don't need a working group to give cities more powers.  Cities already have all the authority they need to regulate growth.  I think they mostly abuse it:  they impose minimum lot size requirements, rigid density limitations and strict separation of uses.  If a city can enact an ordinance like Austin's McMansion Ordinance, then it can do anything.

Counties lack some of these powers.  Counties can regulate platting and subdivisions, which allows them to dictate things like connectivity and minimum lot sizes, should they choose to do so.  But it's true they can't enact zoning.

Still, the problem for counties is not that they lack zoning, but that they can't regulate "commons" depleted by uncoordinated development.  Wells, for example.  Homeowners who lack connections to water utilities sink their own wells.  No individual homeowner has an incentive to ration his individual use; as a result, they cumulatively drain aquifers, especially in drought conditions.  Counties need the power to protect the aquifers for everyone.

But there is no reason to believe that a working group composed of state officials charged with implementing a statewide smart growth plan would have paid particular attention to county problems.  Much better to pass legislation tailored to counties rather than an open-ended mandate for statewide regulation.

Nothing to see here

The Census Bureau has released a new report (pdf) comparing the growth of Metropolitan Statistical Area central and outlying counties between 2000 and 2007.

Wendell Cox says the report shows "that the nation continues to suburbanize, despite the consistent media 'spin' that people are leaving the suburbs to move to core cities."

[T]he conclusion of the new report is clear. The nation’s most remote suburbs – its exurbs – are growing much faster than the central counties. Whether this trend will now reverse, of course, is up to debate. Perhaps demographic changes and higher energy costs will slow expansion on the outer fringes. More likely, the current recession may well lead to less exurban growth, but history suggests this may prove only a short-lived trend.

My own take is that this report offers little meaningful information other than growth and migration rates for the MSAs as a whole.  Breaking out the numbers for central counties and outlying counties tells us little because the Bureau defines "central counties" expansively as those containing all or a substantial portion of the MSA's urbanized area.   Since a city's urbanized area can and often does stretch across several counties, the Bureau's definition sweeps up counties that we typically consider suburban.  For example, Travis and Williamson are "central counties" in the Austin-Round Rock MSA, even though Williamson is the quintessential suburban county.   (Hays is considered an outlying county, but will almost certainly be a central county in the next census due to the rapid spread of Austin's urbanized area.)

Because of the broad definition of "central" counties, almost all MSA population is "concentrated" in these counties.  In MSAs with more than 5 million, for example, 97.4% of the population lived in central counties (2007 estimates).  For all MSAs, the number is 91.8%.

Naturally, because central counties began with a large baseline population, even large absolute increases in population yielded smaller percentage increases than small absolute increases in the less populous exurbs.   For example, in the Midwestern MSAs, the outlying counties grew at nearly twice the rate of the central counties.  But the central counties added 5 times as many people.   The New York-Northern New Jersey-Long Island MSA is an even more extreme example.  Its central counties grew by 2.6% between 2000 and 2007 while its outlying counties grew at an explosive 26.6% rate.   But the central counties added 480,000 people to just 12,000 for the outlying counties, 40 times as many.

For the United States as a whole, MSA central counties added nearly 17 million people compared to 2.4 million for outlying counites.  Central counties in the northeastern region (which includes New York) added nearly 1 million while the outlying counties added fewer than 24,000.  The South Region's outyling regions added the most by far -- nearly 1.8 million -- but even here the outlying growth was dwarfed by the 7.7 million added by the central counties.   

If the Bureau's goal was to tell us something important about the relative growth of exurbs and central cities, it failed.   There's just not much to the data because of the overly-expansive definition of central counties.   As Wendell points out, this report might very well understate suburban growth (in fact, this is almost certainly true), but this report doesn't shed much light on the question.  Wendell himself recognized this limitation on the data, but unreasonably, I think, attempted to draw an unwarranted conclusions from the report anyway.

Equal protection for truckers

I've argued before that even if we don't congestion price I-35 for all drivers,  we should at least price the road for truckers, which will give them the incentive to take SH 130.   Some have suggested that we simply require through truckers to detour to SH 130.  Atlanta apparently does something like this.

Ben Wear put the notion of an outright ban to Carlos Lopez, the new district engineer for TxDOT's Austin division.  And I'm having trouble believing the answer.

Given all the big rigs clogging Interstate 35 through Austin and the really light traffic on the Texas 130/Texas 45 Southeast tollway loop, can't TxDOT just require trucks to use the tollways?

According to Lopez, there's no state or federal statute that says TxDOT can't do that. On the other hand, there's no state statute saying specifically that it can. Which would seem to leave the way open for something of that order to occur, assuming that the Legislature (over what would likely be fierce opposition from the trucking industry) decided to pass a law like that.

However, TxDOT lawyers say such a statute would probably run afoul of the equal protection clause of the 14th Amendment to the U.S. Constitution. That clause says that no state shall "deny to any person within its jurisdiction the equal protection of the laws."

Truckers could make the argument that making them pay to pass through the Austin area while letting everyone else drive free would violate that clause.

Now I admit I haven't done any legal research here.  But I'm pretty confident truckers won't have an equal protection claim.  Laws treat people differently all the time.  That's the essence of law.  The courts have understood this for a long, long time, and therefore have limited equal protection challenges to laws based on a suspect classification like race or a quasi-suspect classification like sex.  Hence a law that discriminates between whites and African Americans will violate African Americans' right to equal protection unless the law is narrowly tailored to serve a compelling government interest and there is no other way for the government to accomplish this compelling interest.  This is an essentially impossible standard to meet.  Off the top of my head, I can't name any instances approved by the courts.   Quasi-suspect classifications -- those based on sex, for example -- are not subject to quite as demanding an analsyis, but court treat these skeptically, too.

But if a law does not discriminate on the basis of a suspect classification, then  courts will uphold the law as long as it is "rationally related" to a legitimate government interest.  This is con-law speak for, "Congress [or state], do whatever you want to do."  

Truckers are not a suspect classification.  We impose all kinds of unique regulations on them.  The Texas Legislature or any other government can treat truckers differently than ordinary drivers as long as the rules have a rational basis.  

The basis for a ban here is obvious and sensible.  Trucks cause more congestion than cars.  They take up at least twice as much space, and they stop and start more slowly.  Moving the tractor-trailers to another road would ease congestion.  The state has a legitimate interest in clearing congesiton.  Truckers are the most logical place to start. 

The truckers' better objection is practical rather than legal.  As Lopez points out, many trucks are not passing through.  We want trucks making local deliveries to use  efficient routes, including I-35 when necessary.  But this means our ban would have to distinguish between local traffic and through traffic.  I'm not sure how the highway patrol could enforce that.  

The best solution, of course, is to charge truckers to drive on I-35.  Through trucks would have the incentive to switch to SH 130.  Locals would not.  We'd get the optimal result with minimal enforcement costs.  Funny how prices work.