Picturenomics (1) - Congestion and Externalities

Team London and Team Manchester produced lots of ideas when asked at TeachECON to pick out some of the externalities associated with chronic congestion in a local town. Here are some of their suggestions

Team London

Falling house values in areas afflicted by road congestion
Accident risks / parental anxiety / less active population - obesity
Deadweight loss of (scarce) time - late to work / school
Delays to emergency services! And to public transport timetables!
Noise / air / light /visual pollution
Asthma risk – health care costs (boost to private sector health providers!)
Inefficiencies – single car users
Higher logistics costs – higher consumer prices for all of us
Lower fuel efficiency / fuel scarcity / fuel poverty
Scarce road space – road space being a quasi public good
Tragedy of the Commons?
Information failures – faulty traffic lights!
Risk of road rage!
Water pollution from the car wash
Delays …….a chance to join the Slow Movement and savour life!

Team Manchester

Visual disutility from traffic jams, impact on local house prices
Rising incidence of asthma / demand for inhalers
Reduced fuel efficiency
Higher transportation costs – leading to higher retail prices
Lower productivity / deadweight loss of time
Incidences of road rage / stress related illnesses
Delays for emergency vehicles
Costs of monitoring illegal parking
Reduced footfall for local retailers
Delays for local bus services
Increased cost of road maintenance
Increased demand for in-car-comforts
Extra resources used up in providing air conditioning

Here are some supporting web articles on traffic congestion and externalities both here in the UK and overseas
Traffic congestion externalities (Harry Clarke)

How driving a car into Manhattan costs $160 (Felix Salmon, Reuters, 2009)

UK House of Commons parliamentary paper on externalities from road congestion

“The Department for Transport estimates that the average marginal external cost of driving a car an additional kilometre is 15.5p. This allows for the congestion, infrastructure, accidents, local air quality, noise and greenhouse gases. Congestion is by far the largest component at 13.1p/km. The Department notes that the congestion cost varies considerably with traffic conditions, “from 0p/km on quiet rural roads to £1.95/km on the most congested roads in conurbations”. The external cost compares with 3.6p/km paid by motorists in fuel duty and VAT. The tax paid per kilometre therefore appears to cover the marginal external costs per kilometre, other than for congestion.” More here