Rush-hour pricing? Let's just do it
New York Mayor Michael Bloomberg has proposed charging motorists a fee to drive in Manhattan's central business district at peak hours. Commentator Tyler Cowen says such "congestion pricing" on the roads could solve a lot of other problems, too.
Tyler Cowen (George Mason University)
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KAI RYSSDAL: You can get a fancy gadget to tell you where the heavy traffic is, but it can't get rid of the traffic jam itself. New York City Mayor Michael Bloomberg has a plan to do that. He wants to charge drivers a fee to tool around Manhattan's central business district at peak hours. Later this month something called the New York State Traffic Congestion Mitigation Commission will begin discussing the mayor's proposal. Commentator Tyler Cowen says congestion pricing on the roads could solve some other problems, too.
TYLER COWEN: Traffic and the housing market are two of America's biggest messes. But we could improve both problems at the same time. As it stands, it's estimated that American traffic jams waste $78 billion a year in time and fuel.
The best way to cut down on traffic is to make people pay for the right to drive at rush hour. If people have to pay a price, they will cut out their non-essential trips or shift them into other time slots. So far as mechanics go, toll booths are a waste of time, so let's enforce a sticker system or bill people with electronic sensors, as they do in Singapore.
London now uses rush-hour pricing, and initially skeptical Londoners have largely been won over to the idea. Singapore, the pioneer in charging for road use, is one of the few major cities in Asia without regular gridlock.
Road pricing sounds unfair to a lot of people because they think that only the rich can afford to pay the tolls. The current reality is that many people have two-hour commutes each way, and that's even more unfair. Let's not forget that lots of people would rather have more time than more money, and pricing the rush-hour commute would give them that: More time to look for bargains; more times to spend with their families; and more time to enjoy the pace of life.
Cutting down on traffic also would help our troubled real estate market. It would be easier to buy a home further away from town, again because commutes would be shorter. This would help many home prices and give us more residential choice.
And if you are worried about global warming, or the government's budget deficit, road pricing will help these problems too. If you make something free, there's not going to be enough of it. Don't think that roads are any different. When it comes to rush-hour pricing, let's just do it.
RYSSDAL: Tyler Cowen is a professor of economics at George Mason University. His latest book is called "Discover Your Inner Economist."
