Welcome back to Sunday reading. I’m writing this on a quite nice Friday evening in Wellington, after spending two days talking to lots of people.
The best thing I’ve read this week is an article by Emma Espiner in Newsroom: “Embrace foreign students – we may need them one day“. It’s a generous antidote to the stingy, negative attitudes that seem to be hardening among some people:
I imagine some of our international students, like the Chinese girl from a politics class I once took, Christine, who was bemused by our angst about voter turnout, having come from a city where elections were held at the whim of the government and you didn’t know year to year whether you’d get one or not.
I imagine someone like her maybe becoming a politician herself or starting a business and how her experience in New Zealand could frame her response when a New Zealander came seeking a business or political opportunity. I imagine her future employers looking at her CV and feeling that thrill of recognition that this person studied in New Zealand. Wow, New Zealand? She must be good.
Because it’s not just about the money (I promise we’ll get to the money), it’s about seeding our culture among international students who will carry it with them and give us a foothold in other countries. It’s also about maintaining enough critical mass in the education sector to continually build upon and improve our offering. It’s a fine balance, and we need enough people going through the system to invest in attracting good staff, research and facilities. To have universities which are the Harvards of the Pacific, this is essential.
And it’s the Pacific bit which is key here. I have noticed among the growing interest in Māori language and culture more than a smattering of immigrants – South Africans, Indians, English and Chinese – showing up at wananga and Te Reo Māori courses.
I have a vision of international students who have an appreciation of our indigenous culture, having experienced our manaakitanga during their time here. They might learn a little reo, might have suffered awkwardly through their first powhiri and maybe grasped enough of our culture to know that indigenous people aren’t victims defined by statistics. A few might have gone further, been enveloped by the quest for understanding Te Ao Māori and have something eternal lodged inside them. Imagine how cool it would be for New Zealand to not only provide a world class education to our manuhiri (visitors) but also promote our culture too.
On a separate note, in the Wall Street Journal, urban economist Ed Glaeser reviews Richard Florida’s new book, The New Urban Crisis:
The strongest part of “The New Urban Crisis” is the author’s discussion of how to combat such segregation, particularly by building more middle-class housing. His excoriation of NIMBYs—the exponents of a “Not In My Back Yard” anticonstruction ideology—is delightful: He calls them “destructive” urban rentiers who “have more to gain from increasing the scarcity of usable land than from maximizing its productive and economically beneficial uses.” He coins a wonderful phrase, “The New Urban Luddism,” to describe the antigrowth advocates who oppose not only home-building but all infrastructure, including “the transit and subway lines required to move people around.”
These NIMBYs have transformed some of the world’s most successful cities, including New York and Paris, into zero-sum spaces, where each new elite pushes out a poorer household. Urban areas that enable growth, such as Houston today or New York in the 1920s, have historically remained affordable for middle-income residents by enabling abundant new construction. When San Francisco and Boston stymie development with an “enormous and complex thicket of zoning laws and other land use regulations,” these cities ensure that they are too exclusive and expensive, and their poorer residents inevitably view the rich with envy and anger.
The best policy tools we have against segregation are to permit more middle-class rental housing in urban cores and to replace existing, segregated housing units with portable housing vouchers. Mr. Florida argues that local regulations “need to be liberalized and modernized,” but he fears that such deregulation “is likely to mainly add more expensive luxury towers” and in any case will “do little to provide the kinds of affordable housing our cities really need.” I’m less sure: If we permitted enough new units, we’d run out of billionaire buyers. But, by all means, fast-tracking the approval of projects with middle-income units should be something we can all agree on.
Mr. Florida shares many other good ideas. To spur the creation of middle-class clusters, he argues, we should ditch the property tax, which creates “disincentives to add density” because payments scale up with the size of structure. Instead, let’s try a land-value tax, under which the owner of an empty parking lot would pay the same as the owner of a high-rise apartment building, and thus have an incentive to build something useful. (But those incentives will only induce more building if regulations allow more building.) Mr. Florida also favors reducing America’s subsidies for socially engineering homeownership, embodied in the home-mortgage interest deduction. This makes sense: High-rise buildings are overwhelmingly rented; single-family homes are overwhelmingly owner-occupied. When we use the tax system to favor owners over renters, we push people away from higher-density living.
It’s interesting how much of this resonates in many places.
Another topic that is relevant almost everywhere is parking. MarketUrbanism’s Anthony Ling has written up a good interview with parking expert Donald Shoup. Among other things, it’s a good explanation of the crucial importance of getting on-street parking prices right:
MPS: Why shouldn’t public/on-street parking be free and how should it be priced?
DS: Charging too much or too little for on-street parking can cause a lot of harm. If the price is too high and many curb spaces are vacant, adjacent businesses will lose customers, employees will lose jobs, and cities will lose tax revenue. If the price is too low and no curb spaces are vacant, drivers searching for a place to park will congest traffic, waste fuel, and pollute the air. Consequently, the right price for curb parking is the lowest price that can keep a few spaces open to allow convenient access. This is the Goldilocks principle of parking prices—not too high, not too low, but just right.
With conventional parking meters, the price stays the same throughout the day but the occupancy rate varies. With dynamic parking meters, the prices vary but the occupancy rate stays the same—one or two spaces are open. Goldilocks prices will give all drivers great parking karma, and will guarantee front-door access to all businesses.
MPS: Please tell us a little bit about SFpark and smart parking systems.
DS: In 2011, San Francisco adopted SFpark, a pricing program that aims to solve the problems created by charging too much or too little for curb parking. In seven pilot zones across the city, with a total of 7,000 curb spaces, San Francisco installed sensors that report the occupancy of curb space on every block and parking meters that charge variable prices according to location and time of day. The meters were also the first in San Francisco to accept payment by credit cards, and this convenience provided good publicity for SFpark.
SFpark adjusts parking prices every six weeks in response to the average parking occupancy during the previous six weeks. If the occupancy rate on a block is higher than 80 percent during a time period (such as from noon to 3 pm), the hourly price of parking increases by 25 cents. If the occupancy rate is below 60 percent, the hourly price of parking decreases by 25 cents. Consider the resulting prices of curb parking on a weekday at Fisherman’s Wharf, a popular tourist and retail destination, after almost two years of price adjustments.
Before SFpark began in August 2011, the price for a space was $3 an hour at all times. With SFpark, each block can have different prices during three periods of the day—before noon, from noon to 3 pm, and after 3 pm. By May 2012, most prices had decreased in the morning hours. Some prices increased between noon and 3 pm—the busiest time of day—and most prices declined after 3 pm. Prices changed every six weeks, never by more than 25 cents per hour.
SFpark based these price adjustments purely on observed occupancy. City planners cannot reliably predict the right price for parking on every block at every time of day, but they can use a simple trial-and-error process to adjust prices in response to past occupancy rates. The only way to tell whether the price is right is to look at the results. Here is the link to a short article that explains how Sfpark has worked.
I’ve been involved in a few parking management projects – generally, people want to know how much prices should be in a year’s time (or five year’s time). As Shoup points out, that’s the wrong question: the demand for parking with respect to price will vary between times and locations, so the only way to find the right price is to adjust until you get the right result.
My suspicion is that the same dynamic will hold true in transport pricing more generally. For instance, how much of an impact will congestion pricing have on demand? It’s hard to say in advance. A small price could have a big impact, or it might not. We need to start pricing to find out.
Economist Noah Smith raises a similar point in an excellent blog post: “How should theory and evidence relate to each other?” The relevance to the transport pricing issue is that it’s very difficult to extrapolate results between contexts unless you have a theory to explain how they travel. For instance, Shoup finds that a 10% increase in parking prices decreases parking demand by around 4% in San Francisco… but the effects could be larger or smaller elsewhere.
Without a structural model, empirical results are only locally valid. And you don’t really know how local “local” is. If you find that raising the minimum wage from $10 to $12 doesn’t reduce employment much in Seattle, what does that really tell you about what would happen if you raised it from $10 to $15 in Baltimore?
That’s a good reason to want a good structural model. With a good structural model, you can predict the effects of policies far away from the current state of the world.
In lots of sciences, it seems like that’s exactly how structural models get used. If you want to predict how the climate will respond to an increase in CO2, you use a structural, microfounded climate model based on physics, not a simple linear model based on some quasi-experiment like a volcanic eruption. If you want to predict how fish populations will respond to an increase in pollutants, you use a structural, microfounded model based on ecology, biology, and chemistry, not a simple linear model based on some quasi-experiment like a past pollution episode.
That doesn’t mean you don’t do the quasi-experimental studies, of course. You do them in order to check to make sure your structural models are good. If the structural climate model gets a volcanic eruption wrong, you know you have to go back and reexamine the model. If the structural ecological model gets a pollution episode wrong, you know you have to rethink the model’s assumptions. And so on.
If you want, you could call this approach “falsification”, though really it’s about finding good models as much as it’s about killing bad ones.
— Taras Grescoe (@grescoe) May 4, 2017
The final article of the week is a provocative one on disruptive technology. CNNTech’s Matt McFarland writes about “the case for bicycles’ inevitable triumph over cars“:
Bikes, long an underdog on streets, will rule the roads eventually.
That’s the conclusion of Horace Dediu, a prominent analyst of disruptive technologies, who has spent the past three and a half years researching the future of transportation. […]
Bikes’ flexible nature will aid their popularity. You can park a bicycle in your home or your office. A bike can be carried on a bus, car or train. A car doesn’t offer this versatility. A similar case of disruption played out with cameras, as the always-in-your-pocket nature of smartphones helped them leave traditional cameras in the dust.
Bikes have another edge on cars — speed. New York’s shared bicycles have already been shown to travel at a faster average speed than city taxis during peak hours. They’re also more affordable per mile.
While the speed edge seen in New York today doesn’t hold up in every city, it will likely change as electric bicycles emerge. Electric bikes — whose motors generally top out at 20 mph — will attract customers because they don’t have to worry about breaking a sweat, struggling to climb a hill or keeping up with traffic.
“When you get on an electric bike, what we witnessed is a lot of those anxieties are calmed,” said Elliott McFadden, executive director of the Austin B-Cycle, the city’s bikeshare program. It recently surveyed citizens’ interest in electric bikes.
“Normally if we introduce a group to bikeshare, maybe a third or half of people are interested. But almost everybody was really intensely interested in using this service,” he said.
I’m not sure I think it’s the most likely scenario, but it’s at least as likely as some other half-baked ideas about disruptive technology that are running around.
Anyway, that’s all the text for the week. If you want to watch something, try this delightful little consultation video from Manchester… narrated by David Attenborough!