Photo: irargerichEdward Glaeser (over at the Economix blog) and I have been writing about high-speed rail (HSR) over the past couple of weeks; he just finished his cost-benefit analysis of a hypothetical Dallas-Houston line with a look at land-use impacts. His overall conclusion, even making some very generous assumptions in favor of rail, is that the line would be a net cost to society of at least $375 million per year. This includes HSR’s potential environmental benefits as well as the direct gains to riders.
A couple of caveats are in order. First, transportation investments are highly context-sensitive; Dallas-Houston may not pencil out, but other lines may have more potential. Glaeser and I will return to this in a couple of weeks.
Second, we have been considering a true electric high-speed rail system with average speeds of 150 m.p.h. or more. Florida has flirted with such a system, but currently only California is in the advanced stages of planning one. This is where much if not most of the stimulus money will eventually go. The proposals on the table for the rest of the nation are currently much more modest; while electric HSR is the endgame, for now plans focus on maintaining what we have or on raising the top speeds of existing Amtrak trains (outside the Boston-Washington and Los Angeles-San Diego corridors) from 79 m.p.h. to 110 m.p.h. This sounds quite fast, but average speeds would be well below the top speeds; we’d be looking at an effective increase from about 40 to 50 m.p.h. to about 70 to 75 m.p.h. This would be done through many small-scale improvements to existing freight routes, including upgrading track, signaling systems, and crossings.
But even this more modest strategy is not inexpensive. Current estimates are vague, but one puts the cost of upgrades to three comparatively modest Midwest segments (Chicago-St. Louis, Chicago-Detroit, and Chicago-Milwaukee-Madison) at $4 billion. This totals out to $200 per resident of those cities, a considerable amount given that most of those people will use the service rarely, if at all.
Moreover, this path will not have the transformative environmental benefits that HSR backers tout, since the services in question will use diesel trains and will not travel at game-changing speeds.
Certainly neither Glaeser nor I pretend to have the last word on this topic. We are looking to start some debate, not finish it. So if you want to learn more on the pros of true HSR, check out the California High-Speed Rail Authority’s site, or this report for the views of an articulate critic, the Cato Institute’s Randal O’Toole.
I personally am a skeptic, but it’s not because I don’t think HSR is cool. In fact, a love of high-speed rail was one of the things that got me into the transportation field. I have extensive experience planning, designing, constructing, financing, and operating HSR networks; these have spanned the nation and have been terrifically elegant, with state-of-the-art locomotive technology and thousands of miles of flat, straight track to keep speeds high.
However, those HSR systems were built from electricity, not steel. And while the HSR currently being proposed will cost tens of billions, the cost of my HSR network was comparatively modest: perhaps $30 in fixed costs for the purchase of the computer game Sid Meier‘s Railroad Tycoon, plus negligible variable costs for the power to run my computer and depreciation on my mouse button. The sum total of the utility I experienced from this kind of HSR paid for those costs many times over.
Costs in the real world are quite different. HSR is an exciting idea, and if we could make it appear by magic wand it’d be a terrific addition to our transportation network. But everything has a price, and the way things currently stand, the projected costs look like they outweigh the benefits. If the thought of some ominous budget numbers lurking on a piece of paper in far-off Washington doesn’t move you, consider the opportunity costs of this spending, in terms of health care, education, the economy, defense, or a (more effective) method of slowing global warming. Or if you want to keep the money in the realm of transportation, it could go to address what I consider to be the more serious problem we are facing: moving people around within our cities, not between them.
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How about this – the cash for clunkers program has been a big success on many levels.
Next, the nation could start a program that gives companies vouchers/rebates for allowing employees to work from home. The vouchers could be used to purchase a home computer system for the employee, upgrade company HVAC systems to be more efficient, etc.
For every employee who moves to a telecommuting arrangement for 6 months, the company gets a $2,500 voucher. There would have to be rules to reduce gaming the program, but we can figure this out.
Good point #8, because all 60,000 of those people come from out of town and wouldn’t have spent a dime of that money on other things if not for the football game… Oh wait.
As soon as someone tries to logically argue against HSR, there is always someone to say they are working for the automotive or oil lobby. Never fails.
I like the article because the last line takes away that argument. Rails need to solve the daily commute, not the occasional trip between major city centers.
Glaeser and Morris simply assume that competing modes of transportation are subsidy-free. Of course its not true. Highways have been subsidized at the local level for decades. More recently, they are subsidized at the federal level. This takes into account the portion of the gas tax diverted to mass transit.
Morris also assumes a zero sum analysis of either local transit or intercity rail. The fact is that we spend 3% of the federal budget on transportation of any kind. That is why we have bridges falling into the river and why Turkey has HSR and we do not. We need both mass transit and intercity rail and for that matter, more investment in our highways.
The cost is trivial. The money recovered from the tax evaders at UBS alone would pay for the entire Dallas to Houston HSR line very nicely.
Another telecommuting incentive option…
Companies hold a dutch auction to qualifying employees for the right to work from home. Say a company has 2,000 employees and 1,000 have positions that are qualify to bid.
They designate the top 10% of bids as the winners. The lowest qualifying bid applies to all the winners. So if the last winning bid was $2,400, all 100 winners would pay $2,400. The money could come out of the employee’s income pre-tax, so it is not actually $2,400 out of pocket.
Many employees would gladly pay $200 a month if they could save on gas, train tickets, business attire, meals, etc. The savings and the ecological effects would be outstanding.
No great things get started by a team of analysts. Studies of cost-benefit cannot determine whether the thing will look like a good idea a few years down the road. Great ideas that excite the imagination rarely can be justified by cost.
There are cities all over the place that started because the trains had to stop for water and fuel and the railroads could sell land along the right of way. There are not cities in the wilderness waiting for rails and roads. But if you build it they will come.
The best bosses (leaders!) I have knownseen were people who saw a great idea and juggled the figures and found the cash to support it. Bureaucracy kill great ideas.
I can see where this study of HSR is going. It saddens me.
#8
This is a macroeconomic issue.
You cannot create more money just by attracting people to specific events. If I choose not to go to an NFL game this year I will spend the money on something else. No net loss to the world.
And for the people who come to the games from out of town, aren’t you just taking the money they spend away from the visitor’s local economy? How does that benefit the world? The net gain is zero.
Few reason’s why i will tilt towards HSR:
1. It’s safer than car, very few or no accidents compare to highway accidents – so you can’t put value to human life.
2. Compare to air and car drive, weather conditions doesn’t impact HSR.
3. Peace of mind: Compare to driving car, its a peace of mind as you may relax rather than stressing out due to driving itself or weather or traffic jams etc.
4. Compare to air travel, there is no hijack like situation possible. i.e. peace of mind to government.
5. No matter how fast you drive a car or bus, you just can’t beat HSR’s speed. Plus no speeding ticket