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I think the answer is obvious in retrospect. A successful investment had a positive "return on investment" at or above market interest rates. An unsuccessful investment (or waste) had a negative return on investment. Projects with positive but below market rates of return sit in an analytical purgatory.
In prospect, I think I can assess forecasts accurately, and project advocates are not to be trusted for a variety of well-understood reasons ranging from optimism bias to strategic misrepresentation. Unfortunately, other people also think they can assess forecasts accurately, even if we know they can't. If we had better mechanisms for requiring forecasters to be more accurate, we could mitigate these problems.
When these projects are small, it is not terribly important. The analysis of benefits and costs should not be costlier than than the benefits from the analysis (i.e. the difference in total welfare from a build/no build or a build this vs. build that decision). But when the project proponents ask for hundreds of millions of dollars (or more), we should be paying more attention.
A large number of projects seems to fall in the category of what I will dub "Mostly Empty Syndrome". MES projects are infrastructure that are underutilized. Mostly they are not underutilized by design, but by mis-forecast. There are facilities however, like NFL stadiums, that are in fact underutilized by design, with lots of marginal events schedule to mitigate the grossness of the structure.
These are projects that serve purported needs, but those needs don't materialize. Or they just are insufficient to justify the cost. Or they can be met in a different way. A few examples are listed below:
There are some counter-examples perhaps, projects that were long considered white elephants, though eventually demand caught up with supply. Dulles Airport meets this criterion. That still does not mean it was a good idea to build it when it was built, even if it is heavily used today. The 20 years of underutilization are fixed capital that could have been better spent in some other way.
There are other counter-examples, projects that were expected to fail (by someone, though not by proponents) that exceeded expectations. The Pennsylvania Turnpike comes to mind.
What connects MES projects?
"One provision in the state tax bill could have a significant impact on Mayor R.T. Rybak's dreams of building a streetcar in Minneapolis.The bill allows the city to dedicate tax revenues from several specific parcels around Minneapolis to help pay for a new streetcar line. The city pushed for the new funding method because, unlike regional transit like light rail, streetcars would be a localized project requiring more municipal investment.
Federal funding is still key to the deal. The city won federal funding to perform an alternatives analysis for a line along Nicollet and Central Aves. -- which is almost complete -- and city staff are preparing to apply for a TIGER grant to help fund the line itself.
The 'value capture district' designated by the state for funding streetcars is similar to tax increment financing. It uses revenues from parcels near the transit line to pay off bonds issued to build it. "
More on value capture.
Just for the historical record, please find attached a scan of the 1 page / 2 sided brochure that the promoters of the Northern Lights Express distributed at the May 11, 2013 National Train Day event at the Saint Paul Union Depot (in case anyone is unclear on the matter, I do not endorse these claims).
"Why is the default assumption that we give away scarce public right-of-way for the free storage of private vehicles?"]]>
Seriously, you can pay more than a $1000 to bring me in considering airline tickets, hotel, ground transportation, and meals, but you can't get your act together to have a room with wireline internet, a camera enabled laptop (aren't they all now), and Skype or FaceTime or Google Hangouts or any of a hundred other services at a marginal monetary outlay of zero and a time outlay of damn close to that?
I hypothesize one source of the problem is the technological backwardness of the governmental/consulting/advocacy/transportation sector. This is a process of mutual causation. Technological backwardness deters the technologically advanced from entering the sector, reinforcing the backwardness. It's a wonder there are PCs on people's desks. It's no wonder we see no progress. I fully anticipate major changes to the transportation sector to come from outside actors, much like the Google self-driving vehicle because of this innovation aversion.
The second source of the problem might be incentives. I hypothesize the meeting organizers budgeted for travel, and not for information technology. They have no incentive not to spend the budget, the money has to get spent.
The third source of the problem is also incentives. My travel time costs them nothing. My video conferencing takes them a few minutes. No matter their few minutes are a lot less time than my travel, they (not me) are spending it.
I realize video-conferences are not quite as high a resolution in audio or video as being present, and in the hands of the incompetent have meeting-disruptive technical difficulties. But they are good enough for the purposes of this kind of conversation, for which conference calls are often used.
It is not that I object to spending your money, or actually want to save you money. I am not noble in this regard. It is that travel is a major hassle, filled with danger and uncertainty. This is often not worth it for me anymore especially for a less than one-day meeting in a city I have seen plenty of times where I am doing you a favor by being present (you asked me to attend, not vice versa). Moreover, I don't want to eat another dinner at an east coast airport.
Update: Bill Lindeke suggests: @trnsprttnst perhaps transportation scholars are inherently biased towards transporting things/people
I was at a public forum in Hinckley, Minnesota last night (home of the world-famous Grand Casino), giving a talk on the Northern Lights Express (NLX). The crowd was, in the immortal words of Grampa Simpson "Agin' it". My slides are here, though readers of the blog have seen most of the material before.
It was fun, thanks to the many organizers from Pine County.
]]>Over at Marginal Revolution, Tyler Cowen says:]]>Voters are getting more or less what they want, which is some spending restraint, mostly holding the line on taxes, not too much trust in government as a way of moving forward, and a love of entitlements. One can find that objectionable, and indeed I do across a number of fronts, but there you go. We are not going to elect a new people anytime soon, and in this odd sense you can see all the recent political gridlock as reasonably democratic, more so than its critics would like to admit (I know I’ll generate a bunch of criticisms citing poll data about how Americans really want this, that, or the other but I’ll hold my ground on this one).Cowen has bemoaned the trend of declining public investment and rising entitlements. He says this in line with voter preferences. I disagree. Declining public investment and rising entitlement spending is exactly what we would expect from a government run by policy experts over the last 40 years. Nearly everyone would rather the government directly spent less in the domain of her expertise."
For most of the 20th century, government had more public provision and more regulatory cross-subsidy than it does now. Economists hated this situation because it wasn’t pareto optimal. Government housing created hellholes so bad as to inspire movies like Candyman, so economists pushed for less spending and more direct aid. Price controls and protectionism (regulation), like the Interstate Commerce Commission and tariffs, created such yawning deadweight losses that economists pushed for free enterprise and direct aid for the ‘losers.’ These ‘swaps’ were better off for nearly everyone.But both swaps will lower investment as a share of public spending.
Just posted at streets.mn The Yard at Downtown East:
"In a veritable bacchanalia of developments, we have seen three major inter-related activities in Minneapolis’s Downtown East:" [Washington Avenue, The Yard, and The Stadium]]]>
I just finished watching Locomotion: Dan Snow's History of Railways. It doesn't air in the United States (nor is it on US iTunes), so you will need to use your special internet TV show finding powers to get it.
This three episode modern documentary series is a nice social history of trains in England for their first century (through World War I), looking at the both the standard history and some side notes relating railroads with other social changes (from trains for the dead to early soccer hooliganism). If you liked James Burke's Connections, and you like trains, and you like Victorian England, and you like history, and you like British accents, this show is well worth watching.
]]>"We entered the]]>dimlyauthentically-lit Saint Paul Union Depot (SPUD), a large but not magnificent space. A train station with no trains. The restoration is nice, and I am sure a better space than the restorers found it in, but the original structure was really nothing special at all. Having only been to the front of the station previously (the acoustically challenged headhouse), I was actually disappointed at the rest of it given how much fuss and money have been expended on the project."
Price Roads | Accessibility map:
"Excellent accessibility ranking by Dr. David Levinson (the Transportationist) and the Nexus Research Group at University of Minnesota:California has the #1 and #2 most accessible cities, and they provide an interesting contrast in two ways to get accessibility. Accessibility can come from density (everything is close together so it doesn’t take long to go from one place to another) or mobility (everything is far apart but there are huge highways so you can traverse long distances).
I’m excited to see academics using visual media to put across point about public policy."
Reihan Salam When Thinking About Infrastructure, Focus on Accessibility
David Levinson, a transportation economist at the University of Minnesota, has emphasized that one of the key issues in infrastructure investment is improving accessibility, or the ease of reaching valued destinations. One way to improve accessibility is make it easier to traverse long distances, so you can reach a larger number of jobs and consumption opportunities, etc., in a given amount of travel time from home. Another way to improve accessibility is to bunch up jobs and consumption opportunities and homes, i.e., by increasing density. Levinson finds that while accessibility has deteriorated relative to 1990, it has improved relative to 2000. My sense is that the best way to increase accessibility is to focus on implementing peak road-user fees and using the resulting revenue stream to carefully add capacity at bottlenecks, and also to ease local land use regulations that have proven a barrier to increased density in high-productivity regions. These strategies ought to be pursued in tandem. One crude way of putting this is that while we tend to fixate on the “hardware” layer of infrastructure, we should devote more attention to the “software” layer, i.e., the systems governing the allocation of infrastructure resources. Focusing on accessibility rather than infrastructure spending levels as such will get us much closer to tackling the frustrations that plague commuters.
Robert Poole, Surface Transportation Newsletter #115: New Study Ranks Access to Jobs via Auto Commuting
New Study Ranks Access to Jobs via Auto CommutingTransportation is not an end in itself; it's a means to other ends, such as getting to and from work. Taking this point to heart, a growing number of researchers in recent years have promoted the concept of "access" as being more important than speed or travel time, per se. One of the leaders in this field, David Levinson of the University of Minnesota, defines accessibility as "the number of destinations reachable within a given travel time" by a particular mode of transportation. He is the author of a new study called "Access Across America," released last month by U of M's Center for Transportation Studies.
In this study, Levinson estimated the accessibility to jobs by car for the 51 largest U.S. metro areas. His data are for 1990, 2000, and 2010, so in addition to providing a snapshot of conditions as of 2010, the data also allow him to document trends over the past two decades. The results may surprise many of those concerned about traffic congestion in the largest metro areas, because Levinson finds that the 10 metro areas that provide the greatest accessibility to jobs via auto commuting are, in order: Los Angeles, San Francisco, New York, Chicago, Minneapolis, San Jose, Washington, Dallas, Boston, and Houston. And over the past two decades, the places with the largest increases in accessibility by car are Las Vegas, Jacksonville, Austin, Orlando, and Phoenix. Those with the largest decreases are Cleveland, Detroit, Honolulu, and Los Angeles.
What accounts for these findings? Although Levinson doesn't really get into the details, I think one of the most important factors is the ongoing suburbanization of jobs. Remember, Levinson's data are for entire metro areas, and there has been a huge dispersion of jobs throughout these metros over the past 50 years. A good summary of the data was provided last month by Wendell Cox in "Job Dispersion in Major US Metropolitan Areas, 1960-2010." (www.newgeography.com/content/003663-job-dispersion-major-us-metropolitan-areas-1960-2010) For example, in 1960 54% of employment in 35 major metro areas was in the historical core municipalities—but by 2010, that figure had dropped to 30%, with 70% in suburban and exurban areas. The suburbanization of jobs has made huge numbers of workplaces more accessible by car than before, leading to shorter average work-trip travel times than in Canada or Europe.
Levinson's data show that in 31of the 51 metro areas, all the jobs can be reached by car in 30 minutes or less; upping the limit to 40 minutes brings the total to 39 of the 51, and at 60 minutes, almost everyone can reach nearly every job in every one of the 51 metro areas. That's pretty outstanding performance by the highway system, despite the existence of serious congestion.
It's instructive to contrast Levinson's auto accessibility figures with the findings of a Brookings Institution study from 2011 on accessibility to jobs via transit ("Missed Opportunity: Transit and Jobs in Metropolitan America"). Using a 45-minute transit commute time, that study found that only 7% of jobs could be reached, in the 100 largest metro areas. Even at 60 minutes, transit could get people to only 13% of the area's jobs. To reach 30% of the jobs, you need an average travel time of 90 minutes, which is more than three times the duration of the average U.S. auto commute.
Knowing this, some advocates of Smart Growth therefore disparage the suburbanization of employment as "jobs sprawl" and seek to promote public policies that would reverse it, so that transit could do a better job. But that confuses means with ends. If the purpose of an urban transportation system is accessibility, we should work to make the system serve that goal, not engage in a utopian quest to massively reshape the urban landscape. And, as I have written in previous issues of this newsletter, the implication for transit is to develop more flexible systems that can link more people cost-effectively to jobs. That argues for grid-based bus systems as opposed to radial bus and rail systems focused on what used to be the "central business district."
Angie Schmitt: A Better Way to Grade City Transportation Systems
A study recently released by the University of Minnesota presents an interesting alternative to the TTI’s metrics. UMN Transportation Engineering Professor David Levinson recently analyzed metropolitan commuting according to a very different criterion: accessibility, or “the ease of reaching desired destinations.”Levinson attempted to improve on the TTI report by tracking the time it takes for people in the 51 largest U.S. metro areas to reach jobs. His findings stand in stark contrast to the TTI’s report. Large metros like Los Angeles, San Francisco, New York and Chicago offered the greatest number of jobs within a 10-minute car commute, Levinson found.
While TTI’s methodology penalizes cities for locating homes and businesses close together, because that increases congestion, in Levinson’s analysis, higher concentrations of destinations are rewarded for helping to reduce travel times.
“There are two ways for cities to improve accessibility—by making transportation faster and more direct or increasing the density of activities, such as locating jobs closer together and closer to workers,” Levinson writes.
“Accessibility is not a new idea,” he adds. But his is the first study that uses it to systematically attempts to measure how different metro areas compare. The report focuses only on auto access, but the same concepts could be applied to walking, biking, or transit access, he says.To measure accessibility, Levinson factored in average job density, the average speed of car traffic in the transportation network (from the TTI analysis), and the circuity of trips (how indirect they are). The analysis also looked at the number of destinations within 10-, 20-, 30-, and 40-minute “donuts” around the city.
Levinson found that his measure of “accessibility” is linked to a number of positive economic indicators. For example, he found that home prices in a metro area increase 0.23 percent with every 1 percent increase in accessibility. He also found that doubling accessibility leads to a 6.5 percent increase in real average wages.
There are environmental and quality-of-life connections, as well. Levinson found that a 1 percent increase in accessibility is linked to a 0.06 percent reduction in the share of commuters who drive. He also found that accessibility tends to be linked to shorter overall commute times. A 1 percent increase in “accessibility,” he found, is correlated to a 90-second reduction in average commute time each way.
All of this suggests that prioritizing “accessibility” in transportation investment — rather than alleviating congestion – might be more economically beneficial for metro regions.
Levinson found that accessibility, or the ease of reaching important destinations, has declined in the United States over the past two decades. Image: University of Minnesota
Levinson also measured how accessibility has changed in metro areas over time, finding that it has worsened in American regions overall, both since 1990 and since 2000.
Some additional blog discussion below
Atlanta: JunctionATL Opening Our Eyes to Accessibility
Charlotte: PlanCharlotte: Easy access to work? Charlotte’s not atop list
Los Angeles: CurbedLA Real Study Found That LA is Best in the US For Car Commuting - The Commute
Los Angeles: Crikey Is Los Angeles the best US city for commuting?
NRDC Switchboard: 'Accessibility' trumps traffic:
Some other briefer mentions below
Los Angeles Transportation Headlines : LAX Transit Link, ONT Airport, LA2050, Access Across America, LA Bike Wars, LA Light Syncing, Port Railyard,
The Direct Transfer: Accessibility Ranked in 51 Metro Areas
reprinted at Sustainable Cities Collective
UMNews: New U of M study measures accessibility to jobs in top U.S. cities
ITS Library Access Across America: How accessible are the jobs?
Minnesota Public Radio Study ranks Minneapolis-St. Paul #5 in accessibility to jobs by car in 2010
Drew Kerr Five for Five
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Recently published:
This paper introduces ABODE, an agent-based model for Origin-Destination (OD) demand estimation, that can serve as a work trip distribution model. The model takes residential locations of workers and the locations of employers as exogenous and deals specifically with the interactions between firms and workers in creating a job-worker match and the commute outcomes. It is meant to illustrate that by explicitly modeling the search and hiring process, origins and destinations (ODs) can be linked at a disaggregate level that is reasonably true to the actual process. The model is tested on a toy-city as well as using data from the Twin Cities area. The toy-city model illustrates that the model predicts reasonable commute outcomes, with agents selecting the closest work place when wage and skill differentiation is absent in the labor market. The introduction of wage dispersion and skill differentiation increases the average home to work distances considerably. Using data from Twin Cities area of Minneapolis-St. Paul, we also show that the model captures aggregate commute outcomes well. Overall, the results suggest that the behavior rules as implemented lead to reasonable patterns. Future improvements and directions are also discussed.
You can play with the model at street.umn.edu.
]]>"Why does this matter? By being “conservative” and adjusting traffic counts up, they are over-estimating the need for roadway capacity, that is, they are being “liberal” with the number of lanes required to ensure a particular level of service."]]>