Tuesday, May 27, 2008

Transportation Continued

I was happy to find gas cheaper last night than I first thought. Driving back into town Sunday, the first "cheap" gas stations I saw were charging $3.999 for regular. Fortunately, I paid $3.799 last night using a site called gasbuddy.com to check local prices before I left home. I was also again pleased with the mileage on my last tank: close to 30 mpg (which is the EPA estimate for highway driving on my nine-year-old car). I added a new feature to the blog on the right column tracking this information. Note: gas prices are per gallon and rounded to the nearest cent.

The local paper again today had an article on how bus ridership is up in my area, with a lot of people who wouldn't ordinarily consider riding the bus buying their first bus pas. The article also mentioned one couple who have taken to living apart during the middle of the week (not coming home at night) so that they can save gas. That would be tough on me personally, but I guess desperate times call for desperate measures. The problem is the I think we are in “desperate times” for good now.

In my town, we are somewhat fortunate with one of the best bus systems in the area. Buses here are entirely supported by tax dollars and there is no additional fare for riding. While the Libertarian in me bemoans the $100 a year I pay in student fees to support the bus system, from a public policy perspective, this system undoubtedly makes the town a more attractive place to live, allows low-income people a good method of transportation, keeps more cars off the roads and improves air quality.

Perhaps this run-up in gas prices is what is finally needed to get us as a whole to shift toward more fuel-efficient options, like smaller cars, bikes, carpooling and public transportation. It all but seems inevitable, since I don't think gas prices will recede substantially anytime soon. It wouldn't surprise me if within a few years, most families drove small cars getting mileage in the upper 30s, garaging or just renting larger vans/trucks/SUVs/station wagons for occasional hauling or road trips. One of the biggest impediments to people buying smaller (more fuel-efficient) cars seems to be that so many people still drive big cars/SUVs and new car buyers do not want to risk their lives driving a less-safe smaller car. This is a main reason my brother likes Jeeps and won’t buy a smaller vehicle. What happens is that the new car buyer ends up buying a larger vehicle and the process becomes a vicious cycle. Hopefully gas prices will break this cycle, but one possibility is that the government might have to offer an incentive to drive smaller cars or disincentive to drive larger SUVs.

In nearly every political science class I've taken (and I'm a poli sci major), we've discussed game theory so I thought I would take this opportunity to point out how buying big vehicles is in some ways a Prisoner's Dilemma. Though not a perfect example, generally speaking, most people would be better off if everyone would buy smaller (more fuel-efficient) cars. Individually, they would spend less on gas because of their efficiency savings, and prices in general would likely drop because of an aggregate drop in demand. The problem is that individually, it is in each side's best interest to buy a big vehicle for safety. Let's simplify this to Jim and Sally, two people in the market for new cars. We'll look at Jim first. Jim knows he wants to be safe (one of his top criteria for a new car) and he knows that if Sally buys a big vehicle, he wants to buy a big vehicle, because he doesn't want to be killed if his small vehicle gets hit with Sally's big vehicle. Even if Sally buys a small vehicle, Jim still wants a big vehicle, because now he will be even safer in a crash with Sally. Sally will make a similar decision and both will end up with big vehicles, whereas they both would have been better off buying small vehicles. However, they can not trust each other to buy small vehicles. They need some third-party action to keep them both from buying big vehicles. This is where I'm hoping the high price of gas (or possibly, the government, though the chances of that are slim) will force both Jim and Sally to buy small vehicles.

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