The Social Cost of Intercity Transportation

A Comparison of Air and Highway

by David Levinson, David Gillen, and Adib Kanafani

University of California at Berkeley

Levinson, David, David Gillen, and Adib Kanafani (1998) A Comparison of the Social Costs of Air and Highway. Transport Reviews 18:3 215-240.http://nexus.umn.edu/Papers/SocialCost.pdf

Motivation

To measure externalities as a function of usage

To enable the evaluation of the “Full Cost” of different modes under different circumstances

To measure the costs consistently (in $/pkt) to compare fairly

Overview

What are externalities Key Issues Our approach to the problem Cost by cost discussion Summary

What are Externalities

Externalities are the difference between what parties to a transaction pay and what society pays

Coase: property rights problem. Property rights are not assigned to clean air, quiet, uncongested travel.

Key Issues

“Externalities” are Inputs to Production System. Clean Air, Quiet, Safety, Freeflow Time are used to produce a trip.

The System has boundaries: Direct effects vs. Indirect effects

Double Counting must be avoided

Selection of Externalities

Criteria: Direct Effects Not Internalized in Capital or Operating

Costs External to User (not necessarily to system) Result: Noise, Air Pollution, Congestion,

Accidents Not: Water Pollution, Parking, Defense ...

Approach

AirHighway Noise

Air Pollution

Congestion

Accidents

Measurement

Generation

Valuation

Integration

Noise: Measurement

Noise: Unwanted Sound dB(A) = 10 log (P2/Pref)

P: Pressure, Pref: queitest audible sound NEF: Noise Exposure Forecast is a

function of number (frequency) of events and their loudness.

Noise: Generation

Amount of noise generated is a function of traffic flow, speed, types of traffic.

Additional vehicles have non-linear effect: e.g. 1 truck = 80 db, 2 trucks = 83 db, but sensitivity to loudness also rises

Noise decays with distance

Noise: Valuation

Hedonic Models: Decline of Property Values with Increase in Noise --> Noise Depreciation Index (NDI).

Average NDI from many highway and airport studies is 0.62. For each unit increase in dB(A), there is a 0.62% decline in the price of a house

Noise: Integration

Noise Cost Functions ($/pkt) : f(Quantity of Noise, House Values, Housing Density, Interest Rates)

Using “reasonable” assumption, this ranges from $0.0001/vkt - $0.0060/vkt for highway. Best guess = $0.0045/pkt.

For air, about the same, $0.0043/pkt.

Air Pollution: Measurement

Air Pollution Problems: Smog, Acid Rain, Ozone Depletion, Global Climate Change.

EPA “Criteria” Pollutants: HC (a.k.a. VOC, ROG), NOx, CO, SOx, PM10

Other Pollutants: CO2

Air Pollution Generation

Comparison of Modes

Mode Pax km HC kg,M

(gm/pkt)

COkg,M

(gm/pkt)

NOxkg, M(gm/pkt)

C,TonM

(gm/pkt) Highways 5.4 x1012 5,118

(0.95)32,690

(6.053)5,945(1.11)

263.2(46)

Jets 5.8 x1011 54(0.093)

163(0.28)

72.7(0.13)

59.2(100)

Total Transport

6,409 39,972 7,918

Total All Sources

18,536 60,863 19,890

Air Pollution: Valuation

Local Health Effects, Material and Vegetation Effects, Global Effects

Greatest Uncertainty in Global Effects, Proposed “Carbon Tax” have 2 orders of magnitude differences

Air Pollution: Integration

Pollutant Air Cost($/pkt)

Highway Costs($/vkt)

PM10 --- $0.000085

SOx --- $0.000315

HC $0.0001530 $0.003850

CO $0.0000018 $0.000049

NOx $0.0001700 $0.001000

Carbon $0.0005800 $0.000260

TOTAL $0.0009048 $0.005559

Congestion: Measurement

Time: Congested, Uncongested Congested Time Increases as Flow

Approaches, Exceeds “Capacity” Uncongested Time: Freeflow Time +

Schedule Delay

Congestion: Generation

Air Transportation: Delay vs. Usage

0

20

40

60

80

100

120

140

160

Volume/ Capacity

Marginal Average

Congestion: Valuation

Value of Time is a function of mode, time of day, purpose, quality of service, trip-maker.

Wide range, typically $50/hr air, $30/hr car. (Business Trips more valuble than Personal Trips).

On other hand, average hourly PCI rate (40 hour week) gives $10/hr

Congestion: Integration

Time Cost Functions: TC = VoT Qh ( Lf/ Vf + a (Qh / Qho)b)

highway: a=0.32, b=10 air: a=2.33, b=6

Accidents: Measurement

Number of Accidents by Severity Multiple Databases (NASS, FARS) Multiple Agencies (NHTSA, NTSB), +

states and insurance agencies Inconsistent Classification Non-reporting

Accidents: Generation

Accident Rates, Functions Highway: Accident Rate = f(urban/rural,

onramps, auxiliarly lanes, flow, queueing)

Air: Accident Rate = f( type of aircraft)

Accidents: Valuation

Value of Life: average of studies $2.9 M average of highway studies $2.7 M Cost of Non-fatal accident depends on

property damage, injury (degree of functional life lost, police costs, etc.)

Accidents: Integration

Highway Accident Costs estimates range from $0.002 - $0.09/pkt. Our estimate is $0.02/pkt.

Urban / rural tradeoff. Urban more but less severe accidents.

Air Accident Costs $0.0005/pkt.

Summary: $/pkt

Summary: Conceptual

High Uncertainty About Valuation Costs Vary with Usage Accounting, Difficult, but necessary to

avoid double counting.