Trains, Planes, and Automobiles

| 3 Comments

trainsandplanes.jpg

TrainsPlanesAutos.001.png

Paul Krugman (who famously models transportation as an iceberg (and he got his "Nobel" prize in economics for his work in spatial economics and trade theory, showing how aspatial the field is in general), writes about: Trains, Planes, and Automobiles.

There are several problems with this image. First it assumes you are already at the train station waiting to board, as opposed to somewhere randomly in the region. Remember most people do not work or live downtown (even in New York City). Second it ignores the third mode of the title (automobiles). A redrawn figure, which is standard in transportation economics or geography, is shown below. [Similar graphs apply to freight, just change it to Trucks, Trains, and Ships]. The question is whether there is a range between d1 and d2, that is, does rail actually dominate both autos and planes over any region. In terms of travel time it probably does, and looking only at operating cost, it might. In terms of overall cost, including the fixed cost of construction of a new HSR line, it probably does not under current cost structures. The size of this range, if it exists, is, however, empirical, and subject to change with costs and technologies.

3 Comments

Nice job. I would add that capital costs properly done are amortized/depreciated and should show up fully in the operating costs. I am less likely to concede the operating profit considering how Capital costs should be depreciated.

I would also focus on the statistically insignificant difference in the graph where it shows rail with the least cost. Bankers, Investors or Venture capitalists are not going to be flocking to potential less than 10% profits when the risks are in the $billions or $trillions.

Interesting graph...and while the particulars of the d1-d2 range are indeed worthwhile studying, it doesn't matter to me, because the point is that the graphs converge and then diverge again.

What's interesting to me (looking at the graph from an economist's perspective) is that the magnitude of a mistake from NOT ever using rail is very small. The total loss can be characterized as the average difference between rail and the 2nd-best technology -- and it is this loss which must be traded off against the total cost of rail construction and maintenance (which, of course, is considerable.) Because rail is optimal precisely when cars and planes are close together, however, this gain is quite small. You don't get the full "lower envelope" of the cost curve, but using "car" until "plane" is better results in cutting off a very small vertical premium over a fairly small horizontal range.

Maybe we should write up an abstract for EISTA!

David Levinson

Network Reliability in Practice

Evolving Transportation Networks

Place and Plexus

The Transportation Experience

Access to Destinations

Assessing the Benefits and Costs of Intelligent Transportation Systems

Financing Transportation Networks

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This page contains a single entry by David Levinson published on March 5, 2011 10:55 AM.

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