Lately I’ve been thinking about the role of choice in transport and housing. People often underestimate the power of choice in these particular markets. But it’s important to have options – even if someone wants to drive 90% of the time, having the option to take the bus or cycle instead the remaining 10% of the time can make them better off. Morever, even if taking the bus isn’t a good option for you, it might make your neighbour (or your children) better off.
Perhaps it’s best to illustrate this point with a parable. Picture your neighbourhood shops. They might have a post shop, a drycleaner, a dairy, and a couple restaurants or takeaway joints. Basically, businesses that provide services to local residents.
Imagine, for a moment, that your neighbourhood shops have only two eating options, both of which are fish-and-chip shops. If you’re too tired to cook dinner for yourself after a long day of work, and you don’t want to drive to a bigger centre, your options are limited to fish and chips.
Now imagine that a new restaurant is opening up in the neighbourhood. Would you prefer it to be:
- A third fish-and-chip shop, which would compete directly with the existing takeaways and maybe bring down the price of a snapper fillet by twenty cents, or
- An Indian restaurant, which would offer you an entirely new option for dining out?
I think most people would choose the Indian restaurant, hands down. Having more dining options would be good for local residents. Even if they continued to get fish and chips most of the time, the Indian restaurant would be available as an alternative when they couldn’t stomach any more greasy chips.
(Incidentally, I didn’t choose this example at random. Auckland is now a fantastic city to dine in, due to the abundant choices of cuisines that recent migrants have brought to the city. But it wasn’t when my parents were young – it was fish and chips, meat pies, or nothing. Increasing choice has revolutionised the restaurant market.)
At the moment, Aucklanders have constrained transport or housing options. For many trips, driving is the only feasible option. For most households, living in a detached three-bedroom house is the only option on offer. But these options aren’t always well suited for all trips or all households.
Successive governments have tried to improve our wellbeing by, basically, opening more fish-and-chip shops. That means widening roads or duplicating them rather than adding bus lanes or protected cycle lanes. It means building new subdivisions on the edge of the city rather than allowing terraced houses and low-rise apartments to be constructed in existing suburbs.
Aucklanders would be much better off if we had more choices about how to get around and what type of home to live in. Policymakers could stand to take a few examples from the restaurant market.