91–100 of 284 posts
Earlier quoted context omitted.
But should you be able to pay all the people ahead of you in line enough to convince them to let you move in front of them?
This is a very slippery slope if some people have much more money than others.
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Road capacity is a scarce resource, and it should be allocated with a market mechanism like every other resource. You can then take the economic gain created by the increased efficiency and tax it to provide more public transit services.
I'm a really market-oriented guy, but I have concerns about wealth's distorting effect on markets. That is, the "cost" of an item is much less to a wealthy person than to a non-wealthy person. Billionaire Bob can spend $100,000 on a whim, but Pauper Paul can't scrounge $10,000 for life-critical health-care. Or after a natural disaster, market theory says equilibrium prices rise to balance demand, but prices cannot ri…
You just need to be a little less greedy.
I mean, one of the problems with tolls is that it is another form of taxing that has a bigger impact the lower income you have. Without getting into an ideological discussion, having surge pricing on tolls would contribute to a minor divide in class. In Australia this is a current topic, as (in Sydney specifically) there was a recent controversial highway widening which has been funded by tolls and constructed by a p…
China has this big time. Almost all of the infrastructure built out in the current book was privately financed and is heavily tolled (definitely by western standards, it is much worse by Chinese standards). This is part of the reasons chinese logistic prices are so high, but also why there are 8 day traffic jams (because the non-toll option went under construction) and why much of the infrastructure isn’t usable by l…
> Which would you prefer in general: Being forbidden from doing something at all, or allowed to do it at high cost? Under standard economic theory, the latter should always be better. In the first scenario, you have one option: don't do it. In the second, you have two options, including the same option as before. This is not how the human mind works. One part is obvious: would you rather starve, with no options, or s…
Choices made when consequences are so extreme, especially in life or death scenarios, are often different than everyday decisions. A life or death decision would have zero risk tolerance.
For example, in a work environment, one strategy people like to choose is to never say that something is 'impossible', but rather that something has a particularly high price. People are much more comfortable hearing that the effort/costs of doing something aren't for them, rather than feeling like they have no choice at all.
Earlier quoted context omitted.
I'm a really market-oriented guy, but I have concerns about wealth's distorting effect on markets. That is, the "cost" of an item is much less to a wealthy person than to a non-wealthy person. Billionaire Bob can spend $100,000 on a whim, but Pauper Paul can't scrounge $10,000 for life-critical health-care. Or after a natural disaster, market theory says equilibrium prices rise to balance demand, but prices cannot ri…
Some interesting ideas on this front: 1) Using markets to allocate resources without real money: http://review.chicagobooth.edu/economics/2016/article/why-fa... 2) Finland charges road fines on a "day-rate" that varies depending on the offender's income: https://www.theatlantic.com/business/archive/2015/03/finland...
Earlier quoted context omitted.
Some interesting ideas on this front: 1) Using markets to allocate resources without real money: http://review.chicagobooth.edu/economics/2016/article/why-fa... 2) Finland charges road fines on a "day-rate" that varies depending on the offender's income: https://www.theatlantic.com/business/archive/2015/03/finland...
Making fees and fines dependent on income is a good way to get incentives right. In Germany for example health insurance is based on your income, not a fixed amount like here.
—- Medicare payroll taxes are proportional to salary.
—- Low income people that use hospitals generally don’t end up paying for their surgery and care which is passed on to people that do pay their bills.
—- Big pharma offers heavy discounts to low income patients for expensive drugs resulting in higher costs for the rest of us.
—- Under the current Afforadable Care Act free/low cost insurance is provided by raising taxes on the upper income people.
I don’t know what’s the best way to improve the system; I just wish the costs, who was paying for it, and where the money was going was more transparent. It appears that it is intentionally designed to be inscrutable.
My main concern is that with tolls that high that only people with a lot of money can afford them (I make six figures but I doubt I would ever pay $40 for a toll. I would need much more money). These are also often the most influential people so they may think that everything is OK because they can afford the toll and never suffer in traffic. I think the same is happening with health care. Most people in Congress hav…
My main concern is that with tolls that high that only people with a lot of money can afford them (I make six figures but I doubt I would ever pay $40 for a toll. I would need much more money). These are also often the most influential people so they may think that everything is OK because they can afford the toll and never suffer in traffic. I think the same is happening with health care. Most people in Congress hav…
In a nutshell, you need to get down to the "utility" concept. It's used (for example) to theoretically prove/support the idea that free exchange is always beneficial for both parties.
Putting prices onto otherwise unrestricted resources likewise optimizes for utility, especially if there are tragedy of the commons issues. The catch is that utility is measured in dollars.
Price systems increase efficiency by introducing trade-offs. If you don't really need to use the road you won't, because there's a cost to it. But (like you say), this trade-off is different for different people. For rich people, $40 is always worth it. For the middle class, $40 might be worth it if you can get home in time for date night. For poor people, $40 means you can't afford a date night this week. It's never worth it.
Basically, dollar-utility conversion is different for people with more or less money. To call this a utility-efficient outcome, you need to concede that a poor person's family dinner time is worth less. That's obviously false. We can't measure utility in dollars, if we have inequality.
On top of all that, roads are not "full" markets. This is not a free market solution. You can add a price system. but you don't have supply side effects. Prices don't reflect marginal costs of commuting, because there isn't competition. Price signals don't control supply, or lead to more supply. Even if supply wasn't exogenous in practice, the fixed/marginal cost ratio would make the "market" unresponsive anyway. This is not really a "free market" vs "public good" because free market just isn't an available option.
I would like to see some less idealistic economists take over on these issues. One interesting option is creating a fake "currency" for fast lanes. Ideas that assume people's time, enjoyment of the road and transport needs are equivalent. You probably can't take money entirely out of the equation, but there are ways of doing this without handing out benefits to the wealthy at the expense of the poor.
> To many drivers' surprise, though, the tolls during rush hour were high, hitting $34.50 Monday morning and reaching $40 Tuesday. Is this like "surge pricing" on tolls? I thought most of the tolls are fixed to allow people know in advance what they must pay. If it increases based on demand, I think people will get mad. I think the psychology, if any, need not go towards the two choices. But rather what people though…
My main concern is that with tolls that high that only people with a lot of money can afford them (I make six figures but I doubt I would ever pay $40 for a toll. I would need much more money). These are also often the most influential people so they may think that everything is OK because they can afford the toll and never suffer in traffic. I think the same is happening with health care. Most people in Congress hav…
This $40 was a charge that allowed willing, solo drivers to use the car pool lanes. No one had to pay the $40; they could continue to drive solo in the non car pool lanes as they had previously. This option was just added.