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Discussion: (35 comments)

  1. Citizen B.

    Congestion pricing manages demand and then there is the revenue generated. Where the money goes should be for roads and not the general fund. Should revenue be used for public transportation such as more buses?

    Congestion pricing is being used not only in Sweden but other countries also, according to this U.S. gov’t study. Handling revenues efficiently can vary vastly. The Dutch are trying to keep expenses at five percent BUT in London it is fifty percent pounds taken in.

  2. How to solve traffic jams: Raise the price of them by so much that demand falls to almost nothing.

    Eliasson begins his talk with an example of spontaneous order – bread in London – but then goes on to explain how interference with spontaneous order is a good idea.

  3. congestion pricing is a VERY libertarian/free market idea that actually “works”!

    what’s that they say… if you want less of something, tax it?

    :-)

    1. By the way, Larry, the term “free market” means just that: – free of outside interference. You cannot have price controls in a free market.

  4. congestion pricing is a VERY libertarian/free market idea that actually “works”!

    You cannot be in favor of both congestion pricing and anti gouging laws.

    With one you are changing prices to affect demand (an acknowledgement of the law of supply and demand) and with the other you are not allowing price to affect demand. (a silly belief that the law of supply and demand doesn’t exist).

    Either changes in price act as signals that affect supply and demand or they don’t. Which is it, Larry?

    Congestion pricing, or more accurately “congestion avoidance pricing favors those who value their time more than the higher fee, over those who would prefer to spend time in traffic rather than spend money to avoid it.

    1. well.. congestion pricing – establishes an economic value for the trip that is not present ordinarily because of the weak nexus between tax and use.

      tolls are better – they establish a tight user-pays approach and congestion pricing injects economic value.

      It’s a voluntary transaction as you always say and, in fact, in the Washington Area HOT lanes, HOV-3 gets you a free trip in the fast lanes.

      HOT lanes, BTW is a Heritage idea.

      1. So you are in favor of allowing price to signal demanders to reduce demand and suppliers to increase supply?

        1. when it can be accomplished – yes.

          it cannot always be accomplished as per theory.

          and it does not work at all for some things like public school and emergency rooms, etc.

          1. when it can be accomplished – yes.

            So you are now in favor of allowing prices to signal a shortage of gasoline after a natural disaster so as to reduce demand and encourage extra efforts to provide additional supplies?

          2. In a disaster, like we just saw in NY/NJ, the stations themselves could not pump so increasing the price would not increase the supply.

            you just would have created a situation where some people would have it and others not and you’re bordering on insurrection so in a situation like that you’d basically be ALSO sending a signal of “it’s every man for himself” and the rationing is sending a “signal” that government and law enforcement is still functioning albeit crippled.

            In disasters, for necessities, there needs to be interference in the market.

            I’d also point out, we’re talking about necessities.

            No one gives a rat’s behind if someone is charging outrageous prices for underwear or baseball cards or fleet enemas.

          3. In a disaster, like we just saw in NY/NJ, the stations themselves could not pump so increasing the price would not increase the supply.

            Then you mean there’s no supply, so price has no meaning. Few would raise the price for something they don’t have.

            you just would have created a situation where some people would have it and others not…

            That’s exactly what happened, Larry, those who got there early got gas, and those who got there after it ran out didn’t. But, that doesn’t answer the question.

            …and you’re bordering on insurrection so in a situation like that you’d basically be ALSO sending a signal of “it’s every man for himself” and the rationing is sending a “signal” that government and law enforcement is still functioning albeit crippled.

            Rationing? There was no rationing. rationing means limiting the supply, Look it up. The supply was NOT limited by higher prices or anything else.

            In disasters, for necessities, there needs to be interference in the market.

            That’s when the law of supply and demand at work is most evident. Interference

            I’d also point out, we’re talking about necessities.

            No one gives a rat’s behind if someone is charging outrageous prices for underwear or baseball cards or fleet enemas.

            Heh! You really should consider learning some economics, Larry – if that’s even possible.

  5. In any case, the subject is now the price of congestion avoidance, and it appears you believe the law of supply and demand will work to as always does, and price will act to bring supply and demand into equilibrium.

    Keep in mind, that this creates the very same unfairness you abhor in the case of a gasoline shortage. Those who can easily avoid congestion by paying more will do so, and those who can’t afford it will be forced to make other arrangements.

    1. re: ” is now the price of congestion avoidance”

      no.. it’s the price of saving time and money.

      re: gasoline rationing.

      I’m totally on board with supply/demand of gasoline (and other things) in normal non-disaster situations.

      1. You really have no idea how remarkably inconsistent your views are, do you.

        1. and you do?

          ;-)

          so happens.. my views match up quite nicely with a majority of Governors and other elected officials.

          Of course, I realize when we talk about elections and government, it’s especially problematical for you.

          1. and you do?

            Yes, Larry, I’m quite aware of how inconsistent your views are.

          2. ” Yes, Larry, I’m quite aware of how inconsistent your views are”

            do you think government “ideas” are JUST as inconsistent?

            fess up.

          3. do you think government “ideas” are JUST as inconsistent?

            Governments don’t have ideas – people do. If you mean do I think politicians are inconsistent? Absolutely! They make political decisions not economic ones, even though one could assume they have access to actual economic information and advice if they want them.

            You are certainly not flattering yourself by comparing yourself to governors and other politicos. You are currently known for unmitigated ignorance of most subjects discussed here, severely limited reading and comprehension, and a complete inability to think logically – including your incessant use of logical fallacies in place of actual arguments. To compare yourself to politicians invites others to consider that you may also be a liar.

  6. J Scheppers

    I like your commentors much more than the presentor. Let us first acknowledge that the very persons that impose congestion on others on average have the same congestion cost imposed on them by other drivers.

    Hetrogenity in value of time allows for some arbitrage, and clearly if the revenue is dedicated in a manner that creates more value for the payers of the fee than the amount collected it can be a good idea.

    But simply charging a government price and reducing demand seems to me to reduce the efficiency of the road capacity market.

    I beleive you have to ask how you can provide more value to the driver you are charging, before it is a good idea to impose the cost.

    1. re: the govt imposing costs

      well you know.. if the govt proposes letting a private company do the tolls, even more folks get unhappy, eh?

      re: ” the very persons that impose congestion on others on average have the same congestion cost imposed on them by other drivers.”

      yes… it’s like a prized football contest and how does the private sector deal with it when there are more customers than seats?

      of course in congestion pricing – not only can you often use the HOV lane for free if you carpool but you can also shift your hours outside of the most congested period – which people often won’t do because they really don’t know whether it buys them any improvement or not.

      1. well you know.. if the govt proposes letting a private company do the tolls, even more folks get unhappy, eh?

        No. Seeking to maximize profit by maximizing revenue provides maximum benefit for the largest number of consumers of the service. Such an incentive doesn’t exist in government run enterprises.

        1. ” Seeking to maximize profit by maximizing revenue provides maximum benefit for the largest number of consumers of the service. Such an incentive doesn’t exist in government run enterprises.”

          how about this one:

          http://en.wikipedia.org/wiki/Jordan_Bridge

          in favor of private toll roads?

          1. how about this one:

            http://en.wikipedia.org/wiki/Jordan_Bridge

            Thanks for the link. I now know some things about a bridge I never before knew existed. I’m sure you believe you have made some point by providing the Wiki reference, but I’ll be damned if I know what it is.

            in favor of private toll roads?

            Yes.

          2. re: wiki point? no point… they’re just one way to reference things and they not only provide you with foot notes but often keyword references that you can use in a follow-on search.

            if you look.. you’ll see 12 footnotes/references

            much easier than me providing all 12 to you…

          3. re: wiki point? no point… they’re just one way to reference things and they not only provide you with foot notes but often keyword references that you can use in a follow-on search.

            if you look.. you’ll see 12 footnotes/references

            much easier than me providing all 12 to you…

            As usual, your poor reading skills makes communication difficult.

            What was YOUR point? Why did you provide a link to the Jordan Bridge story?

          4. totally private, no government.

      2. yes… it’s like a prized football contest and how does the private sector deal with it when there are more customers than seats?

        Both the private and public sector seem to deal with it by insisting on charging a below market price for the tickets, which will create excess demand – more customers than seats – as surely as night follows day. It is the law of supply and demand at work. Both sectors then enlist the force of government to punish those who would more equitably distribute the available seats based on actual demand.

        I believe you are opposed to a secondary market that discovers the correct price for a football ticket, so it’s hard to understand why you would approve of adjusting prices for congestion avoidance.

        Your views seem diametrically opposed.

        1. ” I believe you are opposed to a secondary market that discovers the correct price for a football ticket, so it’s hard to understand why you would approve of adjusting prices for congestion avoidance.

          Your views seem diametrically opposed.”

          actually I’m fine with scalping tickets, I just think they should sweeten the pot by including lottery tickets.

          :-)

    2. J Scheppers

      Hetrogenity in value of time allows for some arbitrage, and clearly if the revenue is dedicated in a manner that creates more value for the payers of the fee than the amount collected it can be a good idea.

      And if more value isn’t created for the toll payer than the amount of the toll, they won’t pay it, and won’t cross the bridge.

      But simply charging a government price and reducing demand seems to me to reduce the efficiency of the road capacity market.

      Exactly. Merely reducing congestion because it is viewed as undesirable by some bureaucrats isn’t enough reason to raise prices. The change in demand must benefit users of the service.

      I beleive you have to ask how you can provide more value to the driver you are charging, before it is a good idea to impose the cost.

      1. Please ignore the last paragraph above.

      2. re: ” “But simply charging a government price and reducing demand seems to me to reduce the efficiency of the road capacity market.”

        no.. it INCREASES the efficiency of the road!

        when congestion reaches a certain level the efficiency plummets.

        the “value” the government (or private company) is providing is the ability for people to choose – to make their own economic decisions.

        the irony here is that this concept emanated from free market organizations like American Enterprise and CATO- not the government.

        http://www.cato.org/pubs/pas/PA695.pdf

        1. no.. it INCREASES the efficiency of the road!

          More reading problems: That’s road capacity market not road.

          1. ” More reading problems: That’s road capacity market not road”

            is that an opinion?

            perhaps you can explain in further for this cretin…eh?

  7. the irony here is that this concept emanated from free market organizations like American Enterprise and CATO- not the government.

    The irony here is that Larry is embracing the law of supply and demand.

    http://www.cato.org/pubs/pas/PA695.pdf

    Thanks for the link. Good article. O’Toole is highly regarded on transportation issues and a serious critic of government planning..

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