The Social Cost of Intercity Transportation

1
The Social Cost of Intercity Transportation

• A Comparison of Air and Highway
• by David Levinson, David Gillen, and Adib
  Kanafani
• University of California at Berkeley

Levinson, David, David Gillen, and Adib Kanafani
(1998) A Comparison of the Social Costs of Air
and Highway. Transport Reviews 183
215-240. http//nexus.umn.edu/Papers/SocialCost.pd
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2
Motivation

• To measure externalities as a function of usage
• To enable the evaluation of the Full Cost of
  different modes under different circumstances
• To measure the costs consistently (in /pkt) to
  compare fairly

3
Overview

• What are externalities
• Key Issues
• Our approach to the problem
• Cost by cost discussion
• Summary

4
What are Externalities

• Externalities are the difference between what
  parties to a transaction pay and what society
  pays
• Coase property rights problem. Property rights
  are not assigned to clean air, quiet, uncongested
  travel.

5
Key Issues

• Externalities are Inputs to Production System.
  Clean Air, Quiet, Safety, Freeflow Time are used
  to produce a trip.
• The System has boundaries Direct effects vs.
  Indirect effects
• Double Counting must be avoided

6
Selection of Externalities

• Criteria Direct Effects
• Not Internalized in Capital or Operating Costs
• External to User (not necessarily to system)
• Result Noise, Air Pollution, Congestion,
  Accidents
• Not Water Pollution, Parking, Defense ...

7
Approach
Measurement
Generation
Integration
Valuation
Air
Highway
Noise
Air Pollution
Congestion
Accidents
8
Noise Measurement

• Noise Unwanted Sound
• dB(A) 10 log (P2/Pref)
• P Pressure, Pref queitest audible sound
• NEF Noise Exposure Forecast is a function of
  number (frequency) of events and their loudness.

9
Noise Generation

• Amount of noise generated is a function of
  traffic flow, speed, types of traffic.
• Additional vehicles have non-linear effect e.g.
  1 truck 80 db, 2 trucks 83 db, but
  sensitivity to loudness also rises
• Noise decays with distance

10
Noise Valuation

• Hedonic Models Decline of Property Values with
  Increase in Noise --gt Noise Depreciation Index
  (NDI).
• Average NDI from many highway and airport studies
  is 0.62. For each unit increase in dB(A), there
  is a 0.62 decline in the price of a house

11
Noise Integration

• Noise Cost Functions (/pkt) f(Quantity of
  Noise, House Values, Housing Density, Interest
  Rates)
• Using reasonable assumption, this ranges from
  0.0001/vkt - 0.0060/vkt for highway. Best
  guess 0.0045/pkt.
• For air, about the same, 0.0043/pkt.

12
Air Pollution Measurement

• Air Pollution Problems Smog, Acid Rain, Ozone
  Depletion, Global Climate Change.
• EPA Criteria Pollutants HC (a.k.a. VOC, ROG),
  NOx, CO, SOx, PM10
• Other Pollutants CO2

13
Air Pollution Generation

• Comparison of Modes

14
Air Pollution Valuation

• Local Health Effects, Material and Vegetation
  Effects, Global Effects
• Greatest Uncertainty in Global Effects, Proposed
  Carbon Tax have 2 orders of magnitude
  differences

15
Air Pollution Integration
16
Congestion Measurement

• Time Congested, Uncongested
• Congested Time Increases as Flow Approaches,
  Exceeds Capacity
• Uncongested Time Freeflow Time Schedule Delay

17
Congestion Generation

• Air Transportation Delay vs. Usage

18
Congestion Valuation

• Value of Time is a function of mode, time of day,
  purpose, quality of service, trip-maker.
• Wide range, typically 50/hr air, 30/hr car.
  (Business Trips more valuble than Personal
  Trips).
• On other hand, average hourly PCI rate (40 hour
  week) gives 10/hr

19
Congestion Integration

• Time Cost Functions TC
  VoT Qh ( Lf/ Vf a (Qh / Qho)b)
• highway a0.32, b10
• air a2.33, b6

20
Accidents Measurement

• Number of Accidents by Severity
• Multiple Databases (NASS, FARS)
• Multiple Agencies (NHTSA, NTSB), states and
  insurance agencies
• Inconsistent Classification
• Non-reporting

21
Accidents Generation

• Accident Rates, Functions
• Highway Accident Rate f(urban/rural, onramps,
  auxiliarly lanes, flow, queueing)
• Air Accident Rate f( type of aircraft)

22
Accidents Valuation

• Value of Life
• average of studies 2.9 M
• average of highway studies 2.7 M
• Cost of Non-fatal accident depends on property
  damage, injury (degree of functional life lost,
  police costs, etc.)

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Accidents Integration

• Highway Accident Costs estimates range from
  0.002 - 0.09/pkt. Our estimate is 0.02/pkt.
• Urban / rural tradeoff. Urban more but less
  severe accidents.
• Air Accident Costs 0.0005/pkt.

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Summary /pkt
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Summary Conceptual

• High Uncertainty About Valuation
• Costs Vary with Usage
• Accounting, Difficult, but necessary to avoid
  double counting.