The Value of Time
Things like congestion pricing are a hard sell politically, in large part because the idea is so unfamiliar that people get naturally skeptical it will actually benefit them, but the fact of the matter is that everyone hates being stuck in traffic. And as Elana Schor points out, IBM’s Commuter Pain Index survey indicates that people are willing to put their money where their mouth is:
Schor says this means we should reframe the conversation around gas taxes, “When a greater contribution to transportation is pitched as a way to shorten commutes and give workers more free time, the prospect becomes more desirable.”
Very possibly. What’s more this suggests that congestion pricing could pretty substantially improve quality of life in a lot of metropolitan areas. If you had a city in which a $10 congestion charge could shave 15 minutes off commutes, the vast majority of people would consider themselves better off. A minority of people wouldn’t consider that a good deal (and they’d presumably be heavily represented among the group of people whose unwillingness to drive into the congestion zone during peak times would produce the reduction in congestion) but a large number of them ought to be able to appreciate the reduced taxes or higher levels of public services that the charge could finance.
57 Responses to “The Value of Time”
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September 11th, 2009 at 12:19 pm
Department of Transportation interdepartmental guidance on the value of traveler time. This gets updated from time to time.
September 11th, 2009 at 12:21 pm
These numbers are way off. I think people are radically overstating how much they dislike traffic. 18% are willing to pay over $30 to save 15 minutes? If you commute to and from work, and work 5 days a week, 50 weeks per year, that’s at least an extra $7,500 per year.
And who really values their time that highly? If you think 15 minutes is worth $30, that’s $120/hour. Would these same people not work for anything less than $120 an hour?
September 11th, 2009 at 12:24 pm
Is that how much people would pay per day, or per year, or what?
September 11th, 2009 at 12:25 pm
I’m with Paulie – these numbers are ridiculous. I’m a highly paid professional, and there’s no *WAY* I can afford to spend $15 a day ($4500 a year) to save 15 minutes a day. This is silly.
September 11th, 2009 at 12:27 pm
in thinking about this issue I am constantly struck by the false argument that somehow a fee would prevent people from using the highways and therefore reduce traffic. Seemingly there is ALREADY a cost of time (they currently do get stuck in traffic) yet people continue to commute that way.
I think the flaw in the survey is the assumption that a surveyed individual would pay x amount of dollars so that somebody ELSE will take mass transportation, when what is really needed is to know what cost would make consumers THEMSELVES switch to mass transit.
It is not effective to simply tax access to the highways (does it really reduce congestion on toll roads? Is I95 less crowded in maryland than deleware?), but requires providing an economical, efficient, and convenient alternative.
September 11th, 2009 at 12:33 pm
Right, I think people are vastly overstating their own willingness to actually pay more. It is always easy for people to say that they’d be willing to pay more in the abstract. When they are actually faced with that reality, would they be so willing?
I do agree that congestion pricing should be put into effect, particularly in places like New York. And yes, we should support public transportation. But I don’t think these numbers are really something to base this on.
September 11th, 2009 at 12:35 pm
I seem to already be doing this… I live and work in the central part of DC and I pay about twice the rent I would pay if I lived in Fairfax or Prince George’s Counties. However, because I have such varied public transportation choices, am within walking distance of all of the necessities and conveniences of life, and have Zipcar at my disposal for the rare occasion that I need a car, I’ve given up car ownership! Not owning a car is quite honestly the most liberating choice I’ve ever made in my life. That said, I put the money I would normally be putting into a car into the increased rent required to live in the city. Just my two cents…
September 11th, 2009 at 12:49 pm
Just to review, congestion pricing:
1. Would require an Orwellian system of tracking where every car goes
2. Penalizes those who drive Hummers and those who drive Priuses equally
3. is unnecessary because WE ALREADY HAVE GAS TAXES
4. Wouldn’t change traffic patterns anyway, because people will still go to work the way they always go to work
5. Would be instant, guaranteed political suicide
Guess Matt’s making up for the lack of “Matt Yglesias hates cars” posts by writing two in a single day.
September 11th, 2009 at 12:54 pm
My view are like alan’s above. This is measuring a willingness to pay so that you can stay in your own car-based pattern, just moving faster. It’s not describing that the effect is supposed to be other people getting off the road, and it’s really not saying that it’s getting _you_ off the road. It caters to the attitude that “I’d be making great time if it weren’t for all these idiots getting me stuck in traffic!” And it’s not leading to any greater awareness that you aren’t just impeded by other people’s traffic; to other people, _you’re_ the traffic.
September 11th, 2009 at 1:01 pm
The people who put a high premium on their time probably have long commutes. My commute is presently at 15 minutes, give or take 10-20 depending on if I eff up my bus timings, so I don’t really see it worth $30 per day or more to shave to zero.
The real trade off is that I live in a tiny condo priced the same as much as a full sized house out somewhere that would necessitate a long, frustrating commute.
September 11th, 2009 at 1:02 pm
Maybe it’s a Midwestern thing, but I just don’t get these posts. I read this blog because I usually agree with MY or at least find his reasoning interesting, but then he throws in these obligatory car posts that make no fucking sense. Is this some way of keeping in touch with his Manhattan roots?
Also, Vidor nails the issue.
September 11th, 2009 at 1:17 pm
Vidor, you’re wrong on most counts:
1. No need to track movements. EZ Pass system can be used to deduct from a debit account.
2. This a feature not a bug. Congestion charges are meant to price the cost of congestion and while the Hummer and Prius have very different environmental impacts, their impacts on congestion are nearly identical.
3. Gas taxes come no where close to covering the full construction and maintenance costs of roads. Again, though, we’re trying to account for the cost of congestion, not the environmental impact. Two seperate costs need two seperate pricing systems.
4. It would alter traffic patters and significantly reduce roadway congestion, see the experience of London.
5. Well, you’re right on that one. As long as Americans have an irrational fixation on the belief that we should be able to drive and park anywhere we damn well please, congestion charges will be political suicide.
September 11th, 2009 at 1:20 pm
The survey smells very fishy. Also consider the dubious connection between what people say they would do and what they would actually do, especially in light of how very much money this per-day rate would extrapolate to.
Congestion pricing means the rich get to push the less rich onto buses so they can have the roads more to themselves. It’s selfish and despicable because it further punishes people for not being sufficiently wealthy.
If you can support this idea under the assumption you will be one of the people priced off the road, then maybe you aren’t just a jerk. But then wouldn’t it be better if everyone had to ride the bus, instead?
September 11th, 2009 at 1:24 pm
[...] Joyner | Friday, September 11, 2009 Matt Yglesias points to a recent IBM study trying to map much people hate commuting to work and points to this [...]
September 11th, 2009 at 1:33 pm
This is a perfect plan! Force poor people off the roads so rich people can save 15 minutes on their commutes. I used to work for a boss who grumbled about this every day–he wanted a $10 per day toll put on his commute to force most of the poor folks off of “his” road.
September 11th, 2009 at 1:34 pm
Most professionals get good benefits. Considering vacation and holidays, the work year is usually 45 weeks – about 1800 hours. Pay is about 10% over nominal, due to health insurance etc. A “highly paid” professional usually means at least $100k/year. Counting benefits and time off, thats over $60/hr, or over $15/15-minutes. Time off is assumed to be more valuable to an individual, otherwise they’d be working.
So, a highly paid professional should certainly be willing to pay $15 for a 15 minute reduction in commute – unless they don’t mind sitting in their car. That’s a real possibility. I have an hour commute, and I find it relaxing and enjoyable, so even though my magic number should be around $13, I wouldn’t pay it.
September 11th, 2009 at 1:35 pm
Out here in the land of the 14 to 5 to 405 people have decided that while they hate traffic they still want a big house with a real yard more than they want shorter commutes. I think it is insane to spend 3+ hours a day stuck in your car but then I do not have children and am fairly happy living in 600 square feet.
The toll roads in Orange County would be full if people were really putting their money where there mouth is.
September 11th, 2009 at 1:35 pm
Wouldn’t it be simpler just to permit only new luxury cars? Same effect; simpler mechanism.
September 11th, 2009 at 1:35 pm
I left taxes out of my calculation. I’ll assume paying for a shorter commute is tax deductible.
September 11th, 2009 at 1:38 pm
“Force poor people off the roads so rich people can save 15 minutes on their commutes”
Oh yes, I forgot
6. Are hugely regressive.
September 11th, 2009 at 1:41 pm
littleguy @13: Congestion pricing means the rich get to push the less rich onto buses so they can have the roads more to themselves. It’s selfish and despicable because it further punishes people for not being sufficiently wealthy.
If you can support this idea under the assumption you will be one of the people priced off the road, then maybe you aren’t just a jerk. But then wouldn’t it be better if everyone had to ride the bus, instead?
Littleguy, why do you hate people who are too poor to afford a car?
Opponents of market-based schemes whose burden falls disproportionately on the less well-off often argue as if the money collected through such schemes is simply destroyed. People who argue for soda taxes or cap and trade are usually the same people who want the government either to reduce taxes on the poor and lower-middle-class or to provide better services like health care or transit to these same people.
In countries where the social cost of driving is better accounted for by taxes, bus service is cleaner, faster, more extensive, and doesn’t carry the stigma it does in the U.S.. For a businessman, doctor, or professor to take the bus in Europe or Japan, even in smaller cities that aren’t so crowded, is nothing out of the ordinary.
So congestion pricing is one step toward improving bus service in the U.S.. It may result in some people who can barely afford to drive being priced out of driving, but it would also result in those people and the much greater proportion of commuters who already take the bus because driving is too expensive having better transit service. All in all, the redistribution would be from people who are rich enough to drive to people who are too poor to drive.
September 11th, 2009 at 1:48 pm
I missed the part where Matt advocated casting all of the money raised into a black hole, instead, the money should be used for “reduced taxes or higher levels of public services ” directed at those who forgo driving. Matt is really foolish for not seeing that possibility.
September 11th, 2009 at 1:53 pm
Gosh, I’m sure glad Matt Yglesias has the back of all of us drivers! Always watching out for our best interests, he is!
September 11th, 2009 at 1:55 pm
Littleguy, why do you hate people who are too poor to afford a car?
It’s perfectly fine with me if everyone has to ride the bus. That was part of my point. However, I simply don’t buy the idea that this would be an incremental move in that direction.
September 11th, 2009 at 1:55 pm
Their should be congestion pricing at public parks and beaches as well. I am sick and tired of all those people who show up early on Saturday and take the best spots. There should be an admission fee during weekends and holidays to curtail the overcrowding.
September 11th, 2009 at 1:58 pm
As an unrepentant elitist, I would love to pay a congestion charge to keep poor people and their poorly-maintained, unsightly cars off the roads. The City of Oakland has recently raised the cost of street parking from $1.50 to $2.00 per hour and, more importantly, has extended the cutoff time from 6pm to 8pm, every day but Sunday. Where there used to be competition for spaces, now there are spaces standing idle. Great for us rich folks!
September 11th, 2009 at 2:03 pm
It’s perfectly fine with me if everyone has to ride the bus. That was part of my point. However, I simply don’t buy the idea that this would be an incremental move in that direction.
Congestion pricing with the revenue spent on transit alternatives = Fewer people driving + better public transportation. How is this not an incremental move toward more people using better bus service?
September 11th, 2009 at 2:12 pm
Thank goodness commenters began to drag public transportation into this thread, because that means it’s time for this!
September 11th, 2009 at 2:18 pm
Matt:
Why didn’t you realize the survey was absurd before you wrote the post?
70% of the people value free time at over $40 an hour. What percent of the people even make $40 an hour?
I make close to $100 an hour, before taxes, and I am not sure my free time is worth $40, AFTER TAXES.
September 11th, 2009 at 2:27 pm
Jason and Njorl,
No one is saying the money would be thrown down a pit. If you want to raise money for programs to help the poor, I’m with you. But that money should come from progressive taxation, not from regressive fees.
September 11th, 2009 at 2:29 pm
Littleguy-
Why must everyone be given either a large subsidy to drive (namely, free roads), or else “forced” to ride the bus?
Can’t we just build the roads, bridges, etc, for people who want them, but put a price on using them, and then use that money for the many people who use the more efficient, more expandable, cleaner forms of transit?
There’s no need to confuse a simple fee for an over-consumed government service with a totalitarian mandate that everyone MUST RIDE the bus.
September 11th, 2009 at 2:35 pm
Many people, however, find commuting to be less enjoyable than their work — more stressful, less rewarding, etc, regardless of financial compensation. In such circumstances, it might make sense to say that you’d be willing to commute for $40 an hour even if you only make $30 an hour on your (more-pleasant-than-commuting) job.
Although it’s still possible that people are overestimating the amount they’d be willing to pay to cut commutes.
September 11th, 2009 at 2:36 pm
Poor people aren’t driving and parking in manhattan, folks. Poor people mostly don’t even own cars in NYC. Poor people are and will increasingly be using the transit services that congestion pricing would fund.
I can understand why auto-bound midwesterners with gutted rust belt cities don’t get congestion pricing. I don’t get why elite eastern urban progressives can not understand congestion pricing.
September 11th, 2009 at 2:36 pm
How is this not an incremental move toward more people using better bus service?
Sorry if I was unclear. It’s not an incremental move *toward everyone taking the bus*. Sure fewer people would drive, and more ride the bus. But now you’ve managed to further sequester and inconvenience the less wealthy — supposedly to help them — but really just to make life more pleasant for the more wealthy.
If this is about making buses nice to ride, then I guess all the supporters of this idea are planning on riding those nice buses. I think the proposal to use the money for better bus service is beside the point, and support for the idea comes primarily from those who want to be in the group that gets faster commutes in their private cars. Not really so charitable.
September 11th, 2009 at 2:52 pm
Can’t we just build the roads, bridges, etc, for people who want them, but put a price on using them, and then use that money for the many people who use the more efficient, more expandable, cleaner forms of transit?
Because of the society you are creating in the process, further exacerbating trends that separate rich from the less-so — in schools, and neighborhoods, and even the security lines at the airport.
Public roadways should be public. America should be more egalitarian, not less.
September 11th, 2009 at 3:10 pm
One thing to note – I would pay a different amount for different 15-minute blocks – my commute is about 45 minutes (independent of mode of transportation – car, bus or bike all take me about the same amount of time).
Knocking 15 minutes off of that wouldn’t really be worth that much to me – but knocking *30* minutes would be worth a lot, but teleportation (commuting in zero time) wouldn’t be worth much more. The marginal cost isn’t constant.
Jo
September 11th, 2009 at 3:14 pm
What is so egalitarian about a public roadway in a congested, transit-rich urban center filled with a relatively small number of space-hogging, polluting, planet-cooking private motor vehicles?
September 11th, 2009 at 3:18 pm
It may be different elsewhere, but where I live, my bus uses the same roads and bridges as the cars. If there were fewer cars, for whatever reason, the bus would presumably get me where I am going faster. This would make me happy.
September 11th, 2009 at 3:28 pm
Paulie Carbone: No one is saying the money would be thrown down a pit. If you want to raise money for programs to help the poor, I’m with you. But that money should come from progressive taxation, not from regressive fees.
littleguy: Public roadways should be public.
Should we then eliminate user fees on all public services and infrastructure? No more bus fares, no more fees to enter or camp in a national or state park, no more parking meters, no more fees for private planes to use the air traffic control system, no more fees for broadcasters to use the airwaves? Or are roads deserving of a special status? Why?
There are all sorts of services the government could provide for free but it doesn’t. It could deliver mail for free; it could perform clinical trials for drug-makers for free; etc.
In a sense, the gas tax is a user fee for a common good — the more you use the common good (roads), the more gas tax you pay, loosely speaking. Should we eliminate the gas tax? An atmosphere with less CO2 is a common good, and a carbon tax or cap-and-trade is a way of putting a price on the use of that common good–should the public atmosphere be public?
Should the use of common goods generally be free? Tell me how this policy would not be disastrous.
I think a lot of people in the U.S. simply think that driving is a natural right like free speech, and efforts to increase the general welfare that involve limitations on or fees for driving are ipso facto wrong.
September 11th, 2009 at 3:34 pm
In general I’m against fees, yes. Charging drug makers for clinical trials, I certainly won’t argue with. The tragedy of the commons is real, I agree with you there. But parks? Parks should definitely be free.
As far as roads go, yes I do view using the public highways as close to a right. It’s not a constitutional right, granted. But there is hundreds of years of tradition behind having public roads that are open to all.
September 11th, 2009 at 4:01 pm
And look what hundreds of years of mostly free roads got you: unrelenting congestion, unsustainable sprawl, near total auto dependence, oil wars…
September 11th, 2009 at 4:21 pm
Jason L.: None of those fees you cite are designed to further stratify society. Only the broadcast spectrum licensing (a whole other discussion)is designed to price anyone out of the market. Gas tax is more progressive because smaller cars use less gas.
Common goods do not need to be free, they just need to reasonably and fairly accessible, otherwise you have effectively privatized them.
Also, if this proposal was all about the general welfare, and it had an even-handed impact, then it would be super. Only it’s not. There may no right to drive in our 200-year-old Constitution, but that does not make it okay to only permit a privileged few to drive cars on roads that we all paid to build and which we all own — and to heap additional inconvenience and stigma on everyone else by making them ride the bus.
September 11th, 2009 at 4:47 pm
Littleguy:
Driving in a traffic-choked, transit-friendly, walkable, bikeable urban center isn’t a “privilege.” For those whom driving is a necessity, congestion pricing makes the road more available. For those whom driving is a convenience, congestion pricing moves them to transit, walking or biking.
Are you as offended by subway and bus fares, Littleguy? My tax dollars also went in to building those systems as well. Why should I have to pay to use those when people driving around in 3-ton piece-o-crap SUV’s are cruising around for free causing traffic congestion for me and the 59 other commuters in the bus I’m riding?
BTW: In NYC, where I live, somewhere around 15% of “little guys” even own a car. Poor and middle class people don’t drive in to Manhattan every day….
September 11th, 2009 at 5:00 pm
to heap additional inconvenience and stigma on everyone else by making them ride the bus.
Stigma. Jesus fucking Christ. I always suspected that lots of people won’t ride the bus because it is full of black/brown/poor/smelly people, so I am not surprised to have that confirmed. What surprises me is that so many people are not ashamed to admit that they are snobs and racists. (Yes, I said “racists.”)
September 11th, 2009 at 5:05 pm
Anytime something has a cost, it, in your language, stratifies society, because poor people can pay costs less well than rich people, generally.
The gas tax is not at all progressive. People who make 100k a year pay a lower proportion of their income as gas tax than people who make 25k a year, assuming both are regular commuters.
You confuse the term “common good” with a publicly-owned good. Common goods are rival and not excludable, meaning one person’s use of the good diminishes the extent to which others can use the good, and no one is prevented from using the good. Common goods are, as a rule, overused, until some means is found of limiting their use by making them excludable. One way of limiting their use is by explicit rationing — this is what the Chinese government did to try to clean up Beijing’s air before the Olympics: cars with odd-numbered plates could drive on half of the days; cars with even-numbered plates could drive on the other half.
Rationing, however, forgoes the opportunity to collect revenue from well-off people who are willing to pay more for a common good. This is money that can be used to destratify society by providing services to the less-well-off, or by giving them more money in the form of lower sales or income taxes. Or, you could just rebate it directly at a constant amount to everyone in the jurisdiction. The net effect would be a transfer of money from people who can afford the fee to those who can’t. People who were in the past using more than their share of the common good would lose out, but those using less would gain. And on the whole, the gainers would generally be those worst-off, and the losers would be those best-off.
September 11th, 2009 at 5:13 pm
To roac and other smelly, dirty, racist bus riders:
Direct subsidies alone pay around 72 cents of every dollar in spending on public transportation. Your $1 bus ride costs more like $4 to provide, and taxpayers pay the other $3 for you. That’s before we consider additional costs from externalities such as pollution and congestion.
If you seriously think subsidies for driving, in the form of congestion costs or anything else, are remotely close to this, show us your evidence.
September 11th, 2009 at 5:14 pm
I’m assuming the existance of a large progressive taxation scheme (income taxes) that dwarfs the money involved in congestion pricing. In that environment, a regressive revenue scheme which is spent almost entirely for the benefit of those affected is fine.
September 11th, 2009 at 5:15 pm
Parks should definitely be free.
A fairly conservative cousin of mine in Pensacola, Florida, has told me that he is happy to pay for an annual pass to the Gulf Islands National Seashore beaches because the entry fee keeps the crowds low.
September 11th, 2009 at 5:17 pm
Popular parks often charge user fees to discourage overuse and defray costs. Crowded beaches almost always mandate the purchase of “beach tags”.
September 11th, 2009 at 5:17 pm
Common goods do not need to be free, they just need to reasonably and fairly accessible, otherwise you have effectively privatized them.
If the criterion for *fairly* accessible is that poor people have equal access as rich people, then the good in fact needs to be free or to have so nominal a fee as to dissuade no one from using it.
What is a reasonable level of access? It must be limited in some way, otherwise the common good will be overused. As I discussed before, you can limit it by rationing, in which case you forgo an opportunity to have a more efficient economy *and* to redistribute wealth toward the less-well-off, or you can limit it by pricing it.
Also, there are some public goods that are inherently accessible only to the fairly well-off, the air traffic control system, for example. This is not because the government, in running an air traffic control system, is trying to stratify society, but rather because rich people can afford to fly and poor people can’t. If this stratification bothers you, then you should favor measures that collect fees from people rich enough to use the good and distribute the proceeds to the less-well-off in the form of lower taxes, better services, or direct rebates.
September 11th, 2009 at 5:41 pm
Matt,
It’s a great theory but congestion pricing has so many practical (impact on neighborhoods adjoining a freeway) and political (logical conclusion that ALL streets have to be priced is a non-starter) that I wish you would get on to more practical idea.
September 11th, 2009 at 6:11 pm
I’m not against gas taxes or freeway tolls, but congestion taxes irk me. I hear the argument that the taxes will fund better public transit but still it seems to me that we should try to remove as many barriers as possible to accessing the city center. Whenever I’m in London it comes off as a playground for rich people rather than a vital city, and Manhattan’s not much better. I would like to think that a devoted urbanist like Matt would see the benefit of a busy, vibrant, even somewhat congested city center.
September 11th, 2009 at 8:36 pm
Wouldn’t it be simpler just to permit only new luxury cars? Same effect; simpler mechanism.
Awesome.
(And this solution would be better aesthetically.)
September 12th, 2009 at 9:37 am
[...] Matthew Yglesias: What’s more this suggests that congestion pricing could pretty substantially improve quality of life in a lot of metropolitan areas. If you had a city in which a $10 congestion charge could shave 15 minutes off commutes, the vast majority of people would consider themselves better off. A minority of people wouldn’t consider that a good deal (and they’d presumably be heavily represented among the group of people whose unwillingness to drive into the congestion zone during peak times would produce the reduction in congestion) but a large number of them ought to be able to appreciate the reduced taxes or higher levels of public services that the charge could finance. [...]
September 12th, 2009 at 1:10 pm
Damn, you know, I really don’t like being this cynical, but I gotta tell you, as someone recently laid off by IBM I know that you gotta really question everything that comes out of their PR Department.
After all, this is the company who tried to patent a program that optimized maximum layoff rate versus tax and severance consequences.
The bottom line, literally, of the IBM report states this: “Commuters are eager for change. Now is the time to invest in the future of smart transportation.”
Frigging IBM.
September 12th, 2009 at 7:53 pm
Does he mean Public transport? Because it takes me as long to walk to the bus stop as it does to drive to work.
As to “congestion pricing,” it is called “parking lot/garage charges/fees.” In my area, an eight-hour stretch next to downtown offices runs more than ten dollars a day.
September 14th, 2009 at 5:13 pm
People have always been willing to pay to reduce congestion. It is just that it has been sold to them as building more roads. So we have been builing more roads for 100 years. How’s that working out for you? Congestion pricing will not work either. First we have to re-frame the debate. The auto is heavily, heavily, heavily, subsidized. People don’t realize it because they are dependent on the auto and see all the costs as “necesary”. The auto is NOT necessary, it has just been forced down our throats.