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]

Government subsidies (cents/vehicle-mile) *Operating costs minus fares, operating+rolling stock costs minus fares, total operating+capital costs minus fares

Air pollution costs (cents/vehicle-mile)

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

Noise costs (cents/vehicle-mile)

Congestion costs (cents/vehicle-mile) Note: congestion charges may cover infrastructure costs

Accident costs (cents/vehicle-mile)

Marginal highway, service costs (cents/vehicle-mile) These are maintenance and service costs, not capital costs

Unpriced parking costs (cents/vehicle-mile)

Inefficient highway user fees (cents/vehicle-mile) *Exempt from fuel tax

Extra private costs (cents/vehicle-mile)

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

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