Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Saturday, January 08, 2005

Paying to Drive in the HOV Lanes

How much would you be willing to pay for the right to drive your car in the High-Occupancy-Vehicle [HOV] lanes on an expressway, even if you are the only person in the car? How much would you be willing to pay if, in the process, you could receive an identification tag that says, "I care about the environment"?

For many people in the Washington, DC, area, the answer to these questions is, "quite a bit." They do not pay directly for these things, but they have displayed a willingness to pay for them indirectly. How? By buying hybrid cars which are recognized by the authorities as "a good thing" and hence receiving the right to use HOV lanes even if they are driving alone. The demand for hybrid cars has increased dramatically in areas where this privilege is granted [registration required; thanks to JA for the pointer]:

According to the Electric Drive Transportation Association, the Washington area ranks with California as the country's leading markets for hybrids.


The growth in hybrids has helped increase the number of cars on the [HOV] lanes to 1,900 an hour, beyond their operating capacity of 1,500 to 1,800 per lane an hour.

Further evidence that "people respond to incentives".

As the quotation above indicates, one problem with the increased number of hybrid cars in the HOV lanes is that those lanes are becoming so congested that many people who used to carpool or ride public transportation so they could have speedier commutes are now finding it is just about as fast to drive alone, even in the non-HOV lanes.

My gut reaction is that HOV lanes are an inefficient way to reduce pollution, and so I welcome these developments. If automobile pollution is a problem, why not add another fifty-cents or dollar per gallon tax on gasoline? People sure as shooting would respond to that incentive!
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