January 6, 2008
Give Me $$$ Because I Ride My Bicycle Everywhere (And Therefore Give You Very Little Gas)
But even if you don’t, I’ll still ride anyways.
Every morning I leave for work, I compete for shoulder space with everyone else going to work in their cars.
Now, the question is: Who is getting to work for free? Is it me or the drivers, some of which do not believe bikers are entitled to sharing the road with them?
The correct answer: me.
I pay nothing to ride and I actually benefit from the exercise I get every morning (a positive externality) whereas every driver I see is paying for wear and tear of their vehicles and for the consumption of gasoline.
Is Harford correct in saying that there is no additional cost for driving after you pay to get on the road (which for all intent and purpose translates to vehicle registration, insurance, and maintenance here in the States)?
Not quite. According to Harford, driving is a voluntary activity (because it is indeed a voluntary activity) so there is a marginal cost, which is the price of gas. The more you drive, the more you pay, and rightfully so.
Why? Because gasoline is a variable cost, not a fixed cost, that can be avoided by not driving as much.
You know, we have it pretty easy here in the United States. Countries in the rest of the world pay so much more for gas that we have no right to complain. Three years ago when I was in Norway, folks over there were paying $7-$8/gallon. And that was back in 2005!
Why not do this right here in the Colorado? I think that would be fantastic!
Like Harford says, the trick is to get drivers to pay for the cost of their actions: they need to pay the externality costs. Make them pay for wearing down our roads! Make them pay for polluting the air! And more importantly, make it more expensive for them to feed me the occasional whiff of car exhaust!
Harford is right: we need to address prices at the margin. Increase the price at the pump. And use that money to 1.) pay for the negative externalities that driving causes and 2.) force existing drivers on the road to have a come-to-Jesus moment and ask themselves “Do I really need to make this trip to the grocery store at 2 am to buy a candy bar?”
One thing is certain: whether you are rich or poor, you will indeed change your behavior because externality charges will make other alternatives look more attractive.
Will rich people continue to drive and poor people resort to public transportation? Probably. But I would rather breathe in a Cadillac Escalade fart than exhaust from an old beat-up truck. At least new car gas doesn’t smell as terrible as old car gas.
But I also have another motive. When rich people waste their money at the pump, I benefit because I own quite a few shares of an oil/gasoline-based mutual fund. Anytime I see people filling their tanks or oil rising in price, the inner economist in me says, “I’m making money off of this so drive all you want while I bike.”
Oh, and before I forget, if any of you want to give me some money because I do my part in sharing very little of my Toyota Camry fart with you (it’s a V6, by the way), just add a comment and let me know where you want to meet.
I’ll bike there!