Transcript How Much Can Policy Affect How Much People Drive?

Do Americans Have A Unique
“Love Affair” with the
Automobile?
Joel Schwartz
Visiting Fellow
American Enterprise Institute
June 24, 2005
Questions
• Have we been forced into driving by
carmakers, roadbuilders, and planners?
• Are Americans unique in their “love affair”
with the automobile?
• Does driving make us worse off overall?
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A Worldwide Love Affair with the
Automobile
• In a wide range of economic, policy, and cultural
contexts, people the world over choose
automobiles for travel and suburban living as
soon as they become wealthy enough to afford
them
• Wealth is the single greatest determinant of
automobile ownership and driving
• Driving is the overwhelming transportation mode
even in countries that heavily tax cars and
driving and provide widespread subsidized
transit
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Have Americans been Forced or
Hoodwinked into Cars and Suburbs?
• If Americans were forced into driving, then transportation
in other countries would look quite different from the U.S.
But it doesn’t.
– Americans use cars for 88% of motorized passenger-miles. In
Europe, the figure is 78%.
– Transit’s share dropped 35% in Europe between 1970 and 2000.
– Singapore’s car ownership quota increased cost of purchasing a
car by 60%, but caused only about a 10% reduction in demand
for automobiles
• Europe has suburbanized much as America
– Population densities in European cities dropped more than 60%
between 1960 and 1990
– Amsterdam’s suburban share grew from 20% to 33% from 19701994, while Paris’s grew from 68% to 77% between 1968 and
1990
• Americans adopted the automobile before interstate
highways and post-war suburbanization
– By 1930, Americans owned 3 cars for every 4 households
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Huge Net Benefits from Driving
• What do people know that policymakers and activists
don’t?
– The dominance of driving and suburbs in wealthy countries is the
result of deep-seated human desires for opportunity, space,
convenience, autonomy, and privacy
– Driving increases choice and opportunity: Greater choice of jobs
and housing. Greater choices and lower prices for consumer
goods. Greater lifestyle competition among cities. Ability to visit
friends and relatives who are otherwise too far away. Greater
recreational opportunities. More rapid response to fires and
medical emergencies.
– Not only do wealthier people buy cars; cars help people become
wealthier.
• Even after accounting for the harm from air pollution,
accidents, congestion, and other ills, automobile travel
delivers trillions of dollars per year in net benefits to
Americans
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More of the Good, Less of the Bad
• Greater safety
– Compared to today, the per-passenger-mile risk of dying in a car
accident was four times greater in 1960 for vehicle occupants
and seven times greater for pedestrians
• Pedestrian improvement is not the result of less walking—
suburbanites are the most physically active group.
– Risk of injury dropped
• Air pollution
– Despite steadily increasing driving, air pollution has steadily
declined. Almost all carbon monoxide pollution comes from cars.
But peak CO levels have declined 75% since 1975 despite more
than a doubling of driving.
• Congestion
– Getting worse, but this is largely the intentional result of public
policies to restrict road building and encourage people to use
transit.
– Although congestion has increased, cars are also much more
comfortable and quiet than they used to be.
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Automobile’s Critics Have It Exactly
Backwards
• The automobile is a powerful enabling technology that
has vastly increased human welfare
• Policymakers and activists have spent decades working
to override people’s preferences, and impose their own
prescriptions for how people ought to live work and
travel.
– These policies have unnecessarily eroded the benefits of
automobile travel by increasing congestion, diverted hundreds of
billions of dollars to transportation modes that few people choose
to use, and driven up the cost of housing by artificially restricting
supply.
• Instead, to maximize Americans’ welfare and prosperity,
policies should be reoriented to work in concert with
people’s choices and aspirations, rather than against
them
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Auto Ownership Follows Income
0.6
USA
• Cars per capita vs.
GDP per capita by
country in 1992
Ita
0.5
Can
Astl
Ger
Fra
Aus Sw e
GB
0.4
Fin
Nor
Net
Spn
Dnk
Jpn
0.3
Ire
Cars per Capita
0.2
Grc
Isr
Prt
0.1
Tw n
Mex
SKo
Tur
0.0
$0
Pak
Ind
Chn
$2
$4
$6
$8
$10
$12
GDP per Capita (thousands)
$14
$16
$18
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Trend in Automobile Ownership
Follows Trend in Income
• Trend in
cars/person vs.
GDP/person, 19701992 (log scale)
• By 1992, many
European countries
had reached
America’s 1970
per-capita income
level, and
America’s 1970
per-capita car
ownership level
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European Travel Trends
3,000
Passenger Miles (billions)
• Passenger miles
by mode, 19702000
• Air is fastest
growing sector,
likely due to
deregulation
• Auto miles
increased by 2.4
• Transit increased
slightly, with bus
increasing more
than rail
2,500
Total
Automobile
2,000
Buses and Coaches
Rail
1,500
Air
Trams and Metros
1,000
500
0
1970
1980
1990
2000
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• Europeans drive less per capita when compared at the
same income level
• But per-capita driving has been growing more than twice
as fast in Europe as in the U.S.
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Automobiles and Opportunity
• Automobile travel is faster that transit, providing
access to three times the land area in a given
amount of travel time.
• Many places aren’t and can’t be served by
transit
• If only half of all households and employers are
accessible by transit, then the auto’s speed and
accessibility advantage would put 12 times as
many employers within reach
• Welfare-to-work studies show owning an
automobile greatly increases the chance of
landing and keeping a job
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Automobile Benefits vs. Costs
• Costs and Benefits (1995)
– Costs: roughly 2 to 4 trillion dollars
• Includes all costs, such as estimated costs of air pollution,
climate change, “free” parking at malls and work, etc.
(Source: DeLucchi 2005)
– Benefits: roughly 6 to 11 trillion dollars
• Includes expenditures and consumers’ surplus
• Even after accounting for “externalities” and
other subsidies and hidden costs, Americans
derive trillions of dollars per year in net benefits
from automobile travel
– This explains why demand for driving and
automobiles is so high, even in countries that levy
large taxes on cars and driving
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Automobiles Compared to Transit
• Driving cost about $0.20 per passenger-mile in
2002, while transit cost $0.82.
– Adding in a recent RFF estimate of “externalities”
would add a few cents per mile to the cost of autos
– Adding in the most extreme and implausible
automobile costs proposed by smart growth activists
would add about $0.23 per passenger-mile
• Full-cost pricing of all modes would decrease
transit use, because transit is so much more
heavily subsidized that autos
– About 64% of transit costs are subsidized by
taxpayers
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More Driving, Less Pollution
2
Annual SO2
Annual NO2
1
8-hour CO
1-hour
ozone
Year
2000
1995
1990
1985
1980
0
1975
Index (1975 = 1)
.
Vehicle
Miles
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What Is the Alternative?
• There is no realistic alternative to the automobile
that would not require large reductions in
people’s autonomy, prosperity, and quality of life
• Automobile travel provides a level of opportunity,
choice, and mobility unparalleled in human
history
• Policymakers should continue to reduce the
negative side effects of automobile travel; but
they should also stop trying to erode the huge
benefits of automobile travel
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Contact information
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•
•
•
Joel Schwartz
[email protected]
916.203.6309
www.joelschwartz.com
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