City size, variety, and consumer surplus
In the 1990s, in the early years of the information technology revolution, economist Robert Solow famously commented that “you can see the computer age everywhere but in the productivity statistics.” Two decades on, that still rings true. Social life has been profoundly transformed by new technology: It has altered the way we communicate with friends and family, how we entertain ourselves, and even how we date.…
27 Comments Do motorways inevitably generate economic growth?
There were a number of odd things in the report released several weeks ago by the New Zealand Council for Infrastructure Development (NZCID), a lobby group. Matt has already reviewed the report in detail. Perhaps the oddest part of it was this sentence:
Motorway capacity is essential because motorways generate economic activity.…
Houston and the fallacy of “roads first” transport policy
Over the last 50 or 60 years, the United States, Australia, New Zealand, and a number of other countries have pursued a “roads first” approach to transport policy. There have been significant public investments in (generally un-tolled) roads, and relatively few investments in competing transport modes.…
If you want more consumption choices, live near lots of other people
One of the many reasons that people choose to live in cities is that cities offer variety. As Stu Donovan has argued before, being around more people sometimes seems inconvenient, but it also exposes you to new ideas, new people, and new consumption choices.…
We need more choice in transport markets
Via economist Donal Curtin, I ran across the draft report that the Australian Competition Policy Review issued last September. It’s a long and fairly technical document, but the introduction made some good points in accessible language:
Competition policy sits well with the values Australians express in their everyday interactions.…
Dude, where’s my hoverboard?
The 1989 sci-fi comedy film Back to the Future II gave audiences a glimpse of what transport would be like in the far-off future date of 2015. Flying cars would merge and flow seamlessly in midair motorways, allowing for cities to be large, low-density, and free of congestion.…
What does the next Aucklander want?
In a recent post on the failures of toll roads, I argued that marginal analysis can be a powerful tool for understanding transport markets:
Economists understand the importance of marginal analysis when making decisions about what to build and how to charge for it.…
How congested is Auckland, really?
A lot of people think that Auckland’s got bad traffic congestion. The annual TomTom Traffic Index reinforces this perception – it regularly describes Auckland as one of the most congested cities in the region. (We’ve previously highlighted the methodological flaws with TomTom’s numbers – don’t take them at face value!)…
Choice matters: an economic parable
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.…
The importance of housing choices in cities
Good cities should provide choices to their inhabitants. Any big (or small!) city is composed of a variety of people with various preferences, needs, and budgets. Look around you: Aucklanders are a bloody diverse bunch, and we’re getting more so as I type these words.…
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