Category Archives: Economics

What if car driving is like playing chess

 

JS Writes in with an intriguing idea:

“What if car driving is like playing chess?  Self-driving cars may be possible and even valuable but the safest most efficient driving may be the combination of the computer and the person/people.  What if one Uber “driver” could drive 10 cars at once, or a team of 3 Uber drivers could drive 100 cars?”

And then sends in the following from the EconTalk podcast …
From Econtalk: Tyler Cowen on Inequality, the Future, and Average is Over 11:01

 

Russ: So let’s talk about what you’ve learned as a chess fan. And you write at some length. At first I was rather taken aback by this, but I grew to find it quite fascinating. You write at some length about the role of machines in chess tournaments, and particularly in freestyle. Talk about that and why it’s a nice potential template for future human interaction.

Guest: Freestyle is a form of chess where a human teams up with a computer. So, if you play human-and-computer against computer, for the most part human-and-computer, if it’s a practiced human, will beat the computer. Even though computers per se are much stronger than humans at chess, it’s the team that’s stronger than either one. And I think this is a good metaphor for a lot of what our job market future will look like. So there’s a big chunk of the book that looks rather closely at freestyle chess and tries to see what we can learn from it.

Russ: The thing I found most provocative about that is that the best freestyle teams do not necessarily have the best human players. In fact that could be something of a handicap.

Guest: That’s right. The really good human players are too tempted to override the computer and substitute in their own judgment. The best freestyle teams, they are quite epistemically modest, the human or humans involved. And what they are really good at is asking questions. So they’ll run two or three different computer programs and then just check on where do those programs disagree. And then they’ll probe more on those points. And that’s what the humans do well that the computers, at least not yet, aren’t able to copy. So it’s knowing what questions to ask that has become the important human skill in this freestyle endeavor.

I still think we will need to turn it all over to the computers, and the sooner the better. Human intervention will need to be so real-time that it is likely to be worse than the algorithm, and the lags in communication are sufficient to be debilitating. But the history of self-driving cars has yet to be written.

Governing transit: the regulated public utility | CityBlock

Alex Block over at the City Block blog writes about Governing transit: the regulated public utility.

The MBTA is struggling, but they’re not the only transit authority facing both near and long-term challenges. The MTA in New York is trying to find the funds for its capital plan; WMATA is facing systemic budget deficits while trying to restorerider confidence in the system.

For-profit corporations such as airlines aren’t the right answer to govern transit in an American context. So, what kind of structure could work?

Writing at Citylab, David Levinson made the case for structuring American transit operations as regulated public utilities, able to pull the best elements of private sector management and pair them with the fundamentally public purpose required for urban mass transit.

David cites seven key elements of this model:

  1. Competitive tendering for services
  2. The ability to raise fares (with regulatory approval)
  3. Using a smartcard as a common platform for fare payment
  4. Specific contracts with local governments to operate subsidized service
  5. Ability to recapture land value through land ownership and real estate development
  6. Access to private capital markets
  7. Local governance, funding, and decision-making

These elements aren’t substantively different from the elements of German public transport governance reforms outlined by Ralph Buehler and John Pucher: competitive tendering for many services, increased fares, investments in technology to improve capacity, efficiency, and revenue. Public regulation oversees these efforts to operate the core business more efficiently.

….

William Louis Garrison (1924-2015)

Saddened to learn of the passing of my co-author and teacher, Bill Garrison.

Article from UC Berkeley Civil and Environmental Engineering News

William Louis Garrison, UC Berkeley professor emeritus in the Department of Civil and Environmental Engineering and former director of Berkeley’s Institute of Transportation Studies, died on Feb. 1, 2015 in Lafayette, CA. He was 90.

Garrison joined the CEE faculty as a Professor in 1973. That same year he was appointed director of the Institute of Transportation and Traffic Engineering (ITTE) (the predecessor of the Insitute of Transportation Studies), a position he held for 7 years. He retired from Berkeley in 1991.

Although his work at Berkeley was focused on how innovation and technological change occurs in the field of transportation, he was well known earlier in his career for leading the so-called “quantitative revolution” in geography.

“Bill moved from geography to transportation in the 1970s. He was particularly interested in innovation and how technological change occurs,” said David Levinson, a former student of Garrison’s who now serves on the faculty of the Department of Civil, Environmental and Geo-Engineering at the University of Minnesota.

“He strongly believed that we should be seeking new development pathways, rather than remaining stuck perfecting existing systems—what he called the ‘polished present’.”

Another former student, Barry Wellar commented in 2007 at the 2007 Anderson Distinguished Lecture in Applied Geography that Garrison “had a way of looking at things that were way outside the box years before that notion was popularized, and even his so-called ‘easy reads’ contained nuances about relationships and processes that would be missed by the casual reader.”

Garrison was born in 1924 and raised in Tennessee. Following his service in World War II during which he did meteorological work for the US Army, he received his PhD in Geography from Northwestern University in 1950.

A few years later, as a young faculty member at the University of Washington, he led the way to revitalizing the field of geography through the use of greater scientific thinking and methods. That led to an increased use of computerized statistical techniques such as multivariate analysis in geographical research. Garrison and his students used such historic computing systems as the IBM 604 and IBM 650. Many of those students would later go on to revolutionize geographic science and geographic information systems.

In recent years, the biennial William L. Garrison Award for Best Dissertation in Computational Geography was created to recognize Garrison’s outstanding research and educational contributions. The award is intended to arouse a more general and deeper understanding of the important role that advanced computation can play in resolving the complex problems of space–time analysis that are at the core of geographic science.

In addition to the University of Washington, Garrison taught at Northwestern University, University of Pennsylvania, University of Illinois, University of Pittsburgh, before he arrived at UC Berkeley in 1973 as Professor in the Civil Engineering Department, and ITTE Director.

By then his interests had shifted to transportation. He made invaluable contributions to the Transportation Engineering Program in the department, expanding and strengthening the planning and policy elements of the curriculum. Likewise, when he took at the helm at ITTE he set out to expand and broaden the scope beyond transportation and traffic engineering.

“Bill steered the insitute into a broad based center for the study of transportation. He expanded its agenda and broadened the community of faculty affiliates to encompass many departments on the campus including City and Regional Planning, Economics, Geography, Public Policy and Sociology,” said Adib Kanafani, CEE Professor of the Graduate School. Kanafani succeeded Garrison as ITS Director in 1983.

“Bill’s leadership was reflected in the institute’s name change as ITTE became the “Institute of Transportation Studies.”

Garrison served on numerous national committees, and served as Chair of the Executive Committee  of the Transportation Research Board in 1973. In the late 1980s he spent time in Austria examining growth trajectories of various transportation technologies. Much of that work is what forms the nucleus of The Transportation Experience first published by Oxford University Press in 2006, then revised and published in a second edition in 2014. His co-author was David Levinson.

“He was one of the few people to take a macro-view of transportation and who tried to understand the long-term dynamics of systems,” said Levinson.

In 2007, Garrison gave the Anderson Distinguished lecture in Applied Geography at the Association of American Geographers in Washington, DC.

In his address, he said:

“About fifty years ago I began to teach a course on transportation geography, and at about that same time I began working with others on highway improvement and financing in Washington State and nationwide telephone communications as a civil defense matter. In subsequent decades I have worked to understand transportation systems of many types as well as engineered systems such as sanitary systems. This work raised many questions of a ‘why do systems and actors do what they do’ sort. To comment on those questions I will refer to constraints formed by networks and institutional structures.”

Systems are birthed when actors combine old or new building blocks and produce services aligned with markets. Early on, there is flexibility as the marriage of systems and markets is forged.

The early decades of the railroads provide a sweeping example. Created by mixing and matching building blocks from tramways, steam engines, canal and toll road construction techniques and pricing protocols and management and financing techniques from military, church and industry they molded themselves like clay. Discovery was a key theme—discovering a workable mix of hard and soft technologies and, equally important, discovering markets. Discovery extended to finding improvements in technologies to respond to social innovations, such as those asking for expanded passenger transportation. Railroads adjusted themselves to circumstances of market density, raw materials for fuel and construction, and styles of national governance. They were flexible.

The flexible period ran from about 1830 to 1860. Afterwards, deployment and growth ruled, and network and organizational inflexibilities began to exert themselves, along with those imposed by those striving to control development using standards, regulations, and other tools. Flexibility became more and more restrained…

I recognize that our legacy infrastructure systems have enormous value. They serve as inputs for all that we do, and shape social and economic structures. They form a record of learning and social and economic actions and achievements. But at the same time, their inflexibilities are costly now and place serious limits on options for the future.”

William Louis Garrison is survived by his wife Marcia Garrison and their four children, Deborah Churich, James Garrison, Jane Garrison Grimaldi, and John Garrison; his three children, Sara Garrison, Ann Darrin, and Helen Saxenian from his first wife Mary Margaret Garrison (who predeceased him); 16 grandchildren, and one great grandchild.

Memorial services will be private at the request of the family.

Our hatred of taxes, demands for services conflict | Wilmington News Journal

Wilmington News Journal writes an Opinion: Our hatred of taxes, demands for services conflict.

As Delaware Transportation Secretary Jennifer Cohan notes, no community leader will deny the state has a funding problem for its roadways. However, as those same community leaders will acknowledge, there is practically no way we are going to solve that problem. Americans in general, and Delawareans in particular, do not like paying taxes. They never did. In recent years the hostility to taxes are grown. The anti-tax movement remains strong and any proposed tax on gasoline makes it even stronger.

The result is, as Secretary Cohan told legislative budget writers last week, $600 million worth of highway projects will be on hold for years. That sounds reasonable, until the missing roadwork affects them. Then it gets personal. The demand for services will go up. However, there still will not be tax increases.

David Levinson, a professor of transportation studies at the University of Minnesota, explains it this way: “Roads are governed by elected officials, who believe they are re-elected when they keep taxes down and are sometimes punished when they raise taxes.” Voters do not trust transportation departments, Professor Levinson says, and they are not always wrong.

Congress is in the same shape as the Delaware General Assembly. It is supposed to fix the federal highway trust fund. However, it seems highly reluctant to do so if it adds anything to the taxpayers’ gasoline bill. Economists believe a way can be found so that the private cost of driving a car comes close to the actual public cost. Despite what we pay at the pump or for tolls or fees, the cost of using the roads and polluting the air is much higher. Economists, both right and left, argue this should be evened out.

Economists, however, do not run for re-election.

The largest source of revenue for the road projects are the tolls on I-95 and Del. 1. This makes sense and follows the same no-tax logic of gasoline levies. The Del. 1 toll is higher on the weekend. The drivers paying that extra money are usually driving for pleasure, not work. The extra cash goes down more easily.

The I-95 tolls is better yet from this point of view. It is a border tax, if you will. The bulk of it is paid by people driving through Delaware. They are highly unlikely to protest a high toll by voting against Delaware incumbents. Our trouble is that we do not have more borders that strangers want to cross.

Every driver has welcomed the current lower price of gasoline. Tax increase suggestions from infrastructure advocates have been shouted down, both by the diehard anti-tax groups and the average motorist who is enjoying the relief. Therefore, the impasse continues. Cars will become even more efficient on gasoline and thus lower the amount of tax coming in. Postponed maintenance will grow more costly and wear and tear on the roads will get worse.

Somewhere along the line, something will have to give. Even re-election wary politicians will be forced to agree.

Delaware of course has some of the highest share of revenue from tolls in the US due to its strategic position of owning a short turnpike between Maryland, Pennsylvania, and New Jersey, of being able to tax foreigners living abroad. Yet even they face the same issue as other states as to how to raise revenue.

Speculative Hypothesis: Planners’ discount rates are too low

When we are children, we learn the fable of the ant and the grasshopper. Briefly, the ant saves food for winter, the grasshopper doesn’t, and instead goes clubbing. The ant survives, the grasshopper doesn’t. Moral lesson: plan for the future, food isn’t as plentiful in the winter.

Dancing Grasshopper. Source: http://srujanakktrip.blogspot.com/2011/09/ant-and-grasshopper.html
Dancing Grasshopper. Source:

And certainly we should all plan to some extent. Today the personal economic issue is retirement, and many people don’t save enough in the US to live as well as they might like upon ceasing full-time work. This is in part because they lived too well while they were working instead of deferring pleasure.

But there is the opposite view, which is that of “live for today, for tomorrow we may all be dead”. Saving for the future does you no good if you have no future. The earth might be destroyed by an asteroid (think about the poor dinosaurs who spent their lives saving and instead of clubbing, where did that get them?). Or we might destroy ourselves (when I was a child, the boogey-man was Nuclear War, then Nuclear Winter, then Acid Rain, then the Ozone Hole, now Global Warming … there is always a boogey-man). Or our society might be undermined by an outside threat: Emmanuel Goldstein, Osama bin Laden, Abu Abdullah al-Rashid al-Baghdadi.

So how much to save depends on the likelihood of survival and persistence. If I expect to live, or at least be able to transfer my wealth to descendants, my motivation for savings is higher. If I expect to die, or have my assets seized, or depreciated in a major round of hyperinflation, really what is the point?

People engaged in the planning field have by their very nature a longer time-horizon than random. They are looking at public works that will take decades to get built (and years to build), and last many more decades if not centuries.

Forecasts predicting gloom and doom (the scare forecast) (too much congestion on a map painted red) far into the future are “bringing distant dangers near”. We have no reason to plan for tomorrow’s possible problems when we have plenty of problems staring us in the face

From a financial economic perspective, it is often unwise to make these long-term speculative investments, or even plan to make these investments, their payback period is too long, the technology may change in the interim. Resources could be better allocated to things which can be made, and innovated, in a much shorter time horizon. The modern version of capitalism ruthlessly (eventually) punishes these investments.

Though I don’t think a formal study has been done, much of the private capital invested in transportation infrastructure historically has been  wiped out [there are many reasons for this, not all of which are market related, some due to regulation], which is why such investments have most recently been mostly left to the public sector. (And recent examples of private infrastructure investment have been nothing to write home about: Dulles Greenway, Indiana Toll Road, the Channel Tunnel, the London Underground are just a few of the high profile disasters.) At a minimum, getting this right is hard.

The discount rate is how we discount future money back to the present, it  the interest rate you earn on investments looked at from the other direction. Are you indifferent to $1.00 today or $1.10 a year from now. Then your discount rate is 10%. The planner’s discount rate asymptotically approaches 0%.

Robin Hanson at Overcoming Bias makes an interesting distinction between “far” and “near” modes of thinking. We are more idealistic in “far” mode. While almost everyone operates in both modes some of the time, some people operate in one mode more often. Hanson points out that “Disagreement is Far“, himself quoting:

Recruiting a sample of Americans via the internet, they polled participants on a set of contentious US policy issues, such as imposing sanctions on Iran, healthcare and approaches to carbon emissions. One group was asked to give their opinion and then provide reasons for why they held that view. This group got the opportunity to put their side of the issue, in the same way anyone in an argument or debate has a chance to argue their case.

Those in the second group did something subtly different. Rather that provide reasons, they were asked to explain how the policy they were advocating would work. They were asked to trace, step by step, from start to finish, the causal path from the policy to the effects it was supposed to have.

The results were clear. People who provided reasons remained as convinced of their positions as they had been before the experiment. Those who were asked to provide explanations softened their views, and reported a correspondingly larger drop in how they rated their understanding of the issues. (morepaper; HT Elliot Olds)

 

Long Range Transportation Planners in practice seldom lay out actual deployment paths, and instead focus on the end state, a vision, a 30-year plan.  A different set of people (or sometimes the same people in a different set of roles) put together a 6-year Capital Improvement Plan. A third set of people deals with annual budgets. A fourth set operationalizes that. A fifth set actual builds and delivers the projects.

As the wise show Parks and Recreation said “There are no planning emergencies”. With the attitude in contrast to most people who live in the now and with urgency, who spend their lives metaphorically if not actually “fighting fires”, it is no wonder that planners cannot meet deadlines. In their worldview, there are no deadlines.

Rising gas prices might make us safer

Tim Harlow at the Star Tribune Drive column reports on our research. Rising gas prices might make us safer

Death, prices correlated

Researcher Guangqing Chi of the Department of Sociology and Rural Studies at South Dakota State University looked at the correlation between gas prices and traffic safety. In a study examining crash data in Minnesota from 1998 to 2007, Chi found that a 20-cent drop in gas prices resulted in 15 more fatalities a year. Conversely, he found that a 20-cent increase would bring a decrease of 15 deaths annually.

The study also found that as gas prices rise, the crash rate per million miles traveled dropped in urban and rural areas. It found higher gasoline prices also have significant effects in reducing property damage and injury crashes.

In another study using data from Alabama and Mississippi, Chi found higher gas prices had the biggest effect on teens. With their lower incomes, teens are discouraged from driving by high gas prices and that reduces their crash rate. That makes the roads safer for other drivers, he said.

When fuel prices skyrocketed to more than $4 a gallon in 2008, many drivers drove less frequently and perhaps less aggressively, which reduced their chances of having a crash, the study said.

The bottom line is that when gas prices go up, “we suspect that people drive more carefully,” Chi said.

Read the paper here: Chi, Guangchi, Mohammed Quddus, Arthur Huang and David Levinson (2013) Gasoline Price Effects on Traffic Safety in Urban and Rural Areas: Evidence from Minnesota, 1998–2007. Safety Science 59: pp. 154-162

Travel behavior study shows drivers are spending less time traveling and more time at home

CTS Catalyst reports on our research: Travel behavior study shows drivers are spending less time traveling and more time at home

Something unprecedented has happened to Americans’ travel patterns. Even before the recent recession, total distance traveled per person had started to decline, and the rate of total vehicle travel had begun to steadily decrease as well.

In a new five-part series of research reports sponsored by the Minnesota Department of Transportation and the Metropolitan Council, U of M researchers are delving into a set of rich data encompassing more than four decades of travel behavior surveys to enable the region’s transportation planners to better understand how its residents make decisions about whether, when, where, and why to travel.

In the first study, researchers examined how changes in the accessibility of destinations—such as jobs, shopping, and leisure activities—have changed travel behavior in the past 20 years.

“We started with a detailed analysis of travel surveys conducted by the Metropolitan Council in 1990, 2000, and 2010,” says David Levinson, the study’s principal investigator and RP Braun/CTS Chair in the Department of Civil, Environmental, and Geo- Engineering. “We found that people are spending slightly less time in motion and more time at home. We also found that accessibility is a significant factor in determining not only travel behavior but overall time budgeting in general. In short, each person has to decide how they will use the time allotted to them each day, and many of those decisions are directly related to the transportation and land-use systems in place.”

A deeper look into the data sheds additional light on the relationship between accessibility and travel behavior. For example, trip durations for workers have gone up for all activities between 1990 and 2010. More noticeably, distances for trips have increased markedly: workers take jobs farther from their homes and shop farther from their homes. Travel speeds also increased for the average worker, due to more travel on faster suburban roadways that carry a larger share of all travel. In contrast, for non-workers, trip durations and overall travel time have gone down.

“Interestingly, although time, distance, and speed per trip has generally risen for workers, the number of those trips is declining,” Levinson says. “As a result, overall, fewer miles are being traveled and less time is being allocated to travel.”

Total time spent shopping also decreased for workers and for males, likely caused in part by an increase in online commerce. “The Internet has provided electronic accessibility, much as the transportation network has in the material world,” Levinson explains. “It helps to facilitate commerce, communication, education, and leisure. This may lead to a decreased need for people to travel, and account for more time spent at home.”

Jonathan Ehrlich, planning analyst with the Metropolitan Council, says the research “helps us get more value from our travel surveys and will aid in understanding how travel is changing, and what the risks are in the assumptions and models we use for planning and forecasting.”

The findings will prove useful not just for Twin Cities transportation planners but for planners and engineers worldwide. “Our models can be easily adapted to data from other cities or for other activities besides work,” Levinson says. “This creates an approach that can be used to gauge the impact of a transportation project from an accessibility standpoint and determine how that project will translate into time allocation.”

Other parts of the study will look at changes in telecommuting behavior over time, the effect of transit quality of service on people’s activity choices and time allocation, changes in travel behavior by age cohort, and analysis of bicycling and walking in light of land-use and transportation system changes. The Catalyst will feature coverage of these projects as they are completed.


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