Housing + Transportation Affordability

Center for Neighborhood Technology: Housing + Transportation Affordability Index
An interesting idea, though I don’t really buy the results, since housing as a percentage of income is a choice and there should not be a standard against which we judge this. If I choose to consume more house and less entertainment, who is to say that is “unaffordable”. If housing + transport in the exurbs take a higher share of income than the cities, isn’t that what the exurbanites prefer, and don’t they get better houses than we city folk (i.e. likely to be new with all the amenities and more sq.ft. per person)?


From the Strib: Northwest Airlines agrees to be acquired by Delta
1) Will the new Delta be any less dominant at any hub than either airline was before?
2) Will there be more service or lower prices?
3) Will fuel prices be lower?
4) Will labor costs be lower?
A merger really only makes sense (for the acquiring company) if it increases benefits (revenue) or lowers costs. I.e. are there synergies or economies of scale/scope to be had, and do those benefits outweigh the transaction cost of the acquisition and integration of two organizations. Given that airlines have not been cumulative profitable over their history … as Warren Buffett has said
(quoted in New York Times) “If we knew then what we know now, we’d have shot the Wright Brothers down.? (“A Profitable 18 Hours That’s All Business,? Tuesday March 11, 2008, C-6) ”
it is doubtful a merger really does much of anything, especially since airline alliances and inter-ticketing are as seamless as regular air travel (not seamless, just “as seamless”)
This article looks at the issue more formally, suggesting profits are centered on zero and are getting more and more volatile, and that the cause is part the large capital orders of airplanes, which have a long lag, are ordered in good times and arrive in bad times, exacerbating the excess capacity problem.
From a local pride issue, the Twin Cities loses another headquarters. However NWA has been steadily slipping in the airline league tables (along with MSP airport in the airport league tables), so this was probably an inevitable loss. But since MSP remains a hub, one expects a similar level of non-stop service and similar level of semi-monopoly prices. If MSP were to lose hub status, a low cost carrier could move in and allow competition to drive down prices, which would not be too bad.

Private Toll Roads

Article in NY Times about experience of privatization on Indiana Toll Roads: Toll Road Offers New Jersey a Fiscal Test Drive . While noting critics, the article is generally favorable. This is an issue primarily for existing public toll agencies which a number of governors want to sell off for cash up front. Secondarily, the issue arises of tolling existing untolled roads and building new private toll roads.
The article did not raise the issue of non-compete clauses, which were the undoing of California SR-91’s private ownership.

Metcalfe’s Law, Accessibility, and Zipf

Bob Metcalfe, Inventor of the Ethernet, famously proposed that the value of a communications network is given by n^2, where is n is the number of members on the network. This has been dubbed Metcalfe’s Law.
In an article published in IEEE Spectrum titled Metcalfe’s Law is Wrong, my colleague Andrew Odlyzko with Bob Briscoe and Benjamin Tilly reason from Zipf’s Law (using Zipf’s Law applied to word frequency, but as transportationists, we could just as easily use Zipf’s Law as applied to city size distribution) why this is not the case, and that n log(n) is a better estimate. In short, not every connection is equally valuable. This is something well understood in transportation, where accessibility measures discount connections by a function of their travel impedance. However this article suggests there is something else going on, that there are, in a sense, diminishing returns to connections. The first connection is more valuable than the second.
One could organize this over time instead of just network size, and suggest that network value grows at a decreasing rate as all the best connections are made first, then the next best connections, and so on.
If this is the case, this generates the hypothesis (which I have not yet tested) that in a hedonic model of price (value) of real estate, accessibility measured as a product of the log of activities will give a better fit than one which just uses activities straight. (Results of hedonic models suggest accessibility is a significant factor in explaining house price, see Access to Destinations: Development of Accessibility Measures (esp. Chapter 5) for an example ).
Traditionally we represent Accessibility (Hansen’s Accessibility Measure) at point i (Ai) as proportional to Destinations at j (say employment Ej) multiplied by f(Cij) where Cij is a travel cost, and f(Cij) is a travel impedance function (e.g. I/Cij^2) in the classic gravity model or e^(B*Cij) using a negative exponential form B<0).
Ai = ∑ Ej * f(Cij)
but the n log(n) argument suggests
Ai = log(∑Ej * f(Cij) )
might give a better fit in a behavioral or hedonic model dependent on accessibility.
(in short we discount the job for its difficulty to reach before we discount it because of diminishing returns. )

The danger of rail

A wonderful quote turned up on the website: The Ponderings of Woodrow: on a blog post about bad predictions:
“Dear Mr. President: The canal system of this country is being threatened by a new form of transportation known as ‘railroads’ … As you may well know, Mr. President, ‘railroad’ carriages are pulled at the enormous speed of 15 miles per hour by ‘engines’ which, in addition to endangering life and limb of passengers, roar and snort their way through the countryside, setting fire to crops, scaring the livestock and frightening women and children. The Almighty certainly never intended that people should travel at such breakneck speed.” — Martin Van Buren, Governor of New York, 1830
Another from a page: Famous Authoritative Pronouncements

“Rail travel at high speeds is not possible because passengers, unable to breathe, would die of asphyxia.”
Dionysius Lardner, Professor of Natural Philosophy and Astronomy at University College, London, and author of The Steam Engine Explained and Illustrated
Great Quotes from Great Skeptics
“What can be more palpably absurd than the prospect held out of locomotives traveling twice as fast as stagecoaches?”
– The Quarterly Review, England (March 1825)

Another player in traffic information

From New York Times: Microsoft Introduces Tool for Avoiding Traffic Jams
The key components for any valid system is data. In most cities, there is no real traffic information on side streets. Developing “personalities” for streets is a nice idea, but without real-time data, it is all guess work.
Bill Gates got his start creating traffic counters, with his company Traf-O-Data, so this may be an idea dear to his heart.

a blog about Networks and Places


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