Every weekend we dig into the archives. This post was originally published back in October 2009.

In my searching for interesting academic studies into transportation issues I came across an excellent analysis of the benefits of rail transportation by Todd Litman, a Canadian transport academic. It’s a very detailed study, running to around 60 pages long, and I certainly haven’t read the whole thing yet. However, there are some very important aspects of this study that offer a far broader and ultimately more comprehensive analysis of the costs and benefits of different transport systems than we are seeing in New Zealand at the moment. To start with, let’s look at the abstract for the research piece:abstract Now while it’s obvious that cities with larger rail systems would have higher transit ridership, some of the other findings are of particular interesting – perhaps most importantly that the more developed a city’s rail system is the lower we find consumer expenditure on transportation and the less congestion that we see. That seems to indicate that it is quite true that investing in public transport (in this case rail) really does have significant benefit for those who remain on the roading system.

Let’s have a look at some of the findings this study came up with. I think of particular interest are the effects on traffic fatalities, consumer transportation expenditure, the portion of household budgets spent on transportation and the effect on the efficiency of the transit systems:


In some ways I think the “portion of household budgets devoted to transportation” is perhaps the most critical statistic here – that residents in cities with large rail systems spend about a fifth less on transportation than those in cities with smaller (or no) rail systems. I think that Auckland spends around 16% of its wealth on transportation – compared to many European or Japanese cities where people spend around 5-10% of their wealth on transport. That’s a huge difference for what seems to me as no real benefit in terms of it being easier to get around Auckland than it is to get around European or Japanese cities. In fact, it may well be even more difficult to get around Auckland – especially if you don’t have a car.

Another interesting statistic that has arisen from Mr Litman’s research relates to the effect of rail systems on congestion levels. This is outlined further in the diagram below:litman-congestion It is interesting to see that Los Angeles has twice the level of congestion per capita as New York City does. Overall, Los Angeles actually has a higher population density than New York (while NYC’s population density is extremely high in Manhatten, it’s much lower in the outer suburbs – while LA’s population density is relatively high throughout the metropolitan area) which to me disproves the theory that you need high population densities for public transport to work. I actually think that things work in the opposite direction more – a well developed rail system will lead to a more sustainable urban form.

Getting back to the analysis of the costs and benefits of rail transit, one of the common arguments against rail is that it sucks up subsidies, and is therefore inefficient at shifting people around when compared to roads that (at least in the case of state highways in NZ) apparently appear to cover their costs. Mr Litman debunks this theory of rail being not worth the cost:litman-conclusion It is fascinating to see how the numbers stack up once we finally see a full and comprehensive analysis of the costs and benefits of public transportation. The above numbers clearly show that basing transportation priorities solely on the grounds of what needs an obvious subsidy and what doesn’t clearly ignores potentially massive wider aspects of transportation that seem to clearly tip the balance in favour of rail-based systems, as shown above. At the moment issues like “consumer cost savings”, “parking cost savings” and (to some extent at least) “traffic accident cost savings” are not really taken into account in the analysis of individual projects and – perhaps more importantly – in analysing the thrust of general transport policy.

If we really simplify things down to try to understand the most efficient way to provide transportation, a good way to analyse the average cost per passenger mile of different modes, and then compare them across different city sizes. Todd Litman’s research does just that, and comes up with some interesting results once you add in the costs of parking provision and roadway costs:mode-cost I really do wish some of the transportation policymakers around New Zealand were doing this kind of work for Auckland, looking at the big picture and really working out the true costs of auto-dependency. It would be far more constructive than the narrow-minded thinking that seems to predominate at the moment.

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    1. I agree they should do something more towards these businesses as I’ve said on Twitter the other day. A couple of pretty hoardings & signs that say “business as usual” etc doesn’t cut it. Who wants to sip a coffee or a beer beside a noisy, construction site often shadowed by the construction safety walls etc, jack hammers, trucks, dust etc etc.

    2. Miffy, was this the greatest business decision in the world? (from the Herald article)
      “Rakesh Chauhan invested $500,000 setting up a smart supermarket on the corner of Albert and Wyndham Sts just before work began on the deep trench for twin underground tunnels.”

      1. So tell me where in the approved Notice of Requirement it says it is ok for AT to create major business disturbance and not pay compensation? There are dozens of pages of conditions, but that isn’t one of them. They are going to have to band together and do a class action.

  1. I am sure that on an individual level few calculate the cost of using only public transport compared with the cost of owning a car.

    I recently looked at the costs of the costs of a modest family car, a low kilometre Honda Odyssey priced at $6500. Adding all costs together, except for the costs of garaging or parking at home, I arrived at a yearly cost of $5100.

    Compare this with a single 12 monthly AT pass to go everywhere at $2580. Clearly with a one member household it is much better, if only financial aspects are considered, for that person not to own a car. I recognise that an individual may choose a more fuel efficient car.

    Even with larger households than 1, a considerable amount of public transport can be purchased with the difference between the cost for one family member of $2580 and $5100.

    I think Auckland has two challenges: the first recognising that providing great (rail based) public transport provides great economic benefits for inhabitants of a city; and second to persuade inhabitants that if they choose to use public transport that they can improve their financial position.

    1. In purely dollar values maybe, but the extra time spend commuting everywhere on PT by virtue of not having a car has a cost too.

      $2,500 seems like it’s comparable on a purely fuel cost basis at $45 a week or so. So throw in an extra $500 for first-party and a small depreciation allowance and you’re still competitive on a $ basis.

      But once you add the time cost in that you’re taking on with a PT-only commute (and then any discretionary travel) things start unworkable.

      1. Buttwizard
        I guess you are assuming that people cannot work while using PT? I guess though that they can also work while driving. Huge numbers of people seem to talk, text and in some cases watch video while driving so productivity may be the same.

        1. I know that New Zealanders work some of the longest additional unpaid hours in the world, and expecting them to monetize their commute time at the end of a work day is going to make that even worse.

    2. Add in a second, third or fourth person and the car is better. Also that AT pass neglects ferry users (of course) and also comes with half-hour waits for most of Auckland, not to mention the option of being stranded in the vity if yo have an event that finishes remotely late.

      I agree though, if we can get public transport way more frequent and cheaper and more equitably provided then we’ll see people choose it over their cars.

      1. David B
        Vienna has an annual pass at about $NZ 700 with a children’s pass at about $NZ 120. Prague is even cheaper. It is not difficult to see why those cities have phenomenal PT ridership. We are in both of those cities in the next month and hope to see why their PT is so successful.

        1. When you’re over there, John, can you find out how they deal with special events? All those people with passes needing public transport at once…

          If they do it well, maybe Auckland could look and learn.

  2. Great find and great post Matt.
    I thought NZTA/AT were supposed to take the wider costs and benefits into account – I’m surprised and dismayed if they don’t.
    The benefits of public transport to motorists suggests that motorists should pay for the provision of public transport to the point of paying a portion or all of the fare component of public transport, as it would be well worth it for them – and the same goes for businesses, health care systems, environmental agencies, etc.: they should all chip in (this what I call “non-user-pays”).*

    * When I suggested this to a transport bureaucrat in Melbourne in 2001, they didn’t get it that public transport users are doing everyone a favour and those who benefit from that favour should compensate the public transport users. Maybe this Litman study will turn on a lightbulb in bureaucrats’ heads.

  3. Policymaking? Please!

    This has got to be the most pointlessly academic post I’ve seen here in a while.

    Kiwirail has had to fight tooth and nail for years even for the Auckland third main funding. The contests for public transport heavy rail capex are brutal and are usually lost inside Kiwirail, even before they are fought and usually lost inside Treasury, before they are usually lost with Ministers. That’s because such capital is scarce.

    That has continued for decades. After a fresh change of government, the current NLTP provides nothing but a halfway house to improve the situation.

    And don’t offer a solution either.

    Kiwirail bumps along begging its masters for massive subsidies most years just to stay alive, and NZTA is simply going to take years to recover from its state. Too many broken parts of the transport system are now even more broken than they were.

    1. A Labour Party minister said that ? That’s almost sacrilege.

      Whatever happened to ‘soak the rich’ and ‘income redistribution’ ?

      I suspect there is an $11 billion dollar fiscal hole somewhere.

      1. Wasn’t $11 billion the projected cost of Steven Joyce’s first tranche of Roads of National Significance. There’s the fiscal hole and it seems fair to argue that Steven Joyce caused it. That’s $11 billion not available for other, more-necessary things.

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