Conventional wisdom wrong again

It is an article of faith for almost anyone with any exposure to economics (basic and beyond) that government policy makers should come to the rescue when markets "fail".

Tom Rubin recently presented commuting travel time data (from the 2005-2007 American Community Survey) for the 74 U.S. Urbanized Areas with more than 500,000 population in 2007. For the group, the average commute times (one-way, all modes) were just over 26 minutes for "central city" residents, but just under 26 minutes for suburban residents. To be sure, these are overall averages and the various urbanized areas differed as to where the average commutes were of shorter duration, but they were always quite close.

Pengyu Zhu has combed the 2001 and 2009 National Household Travel Surveys (NHTS) and also found that "suburban" average commute times were less that "urban" average commute times in both surveys (22.3 minutes vs 26.7 minutes in 2001; 23.6 vs 24.4 minutes in 2009; also one-way, all modes). ACS and NHTS use slightly different definitions, but the results are consistent.

With electronic transponders, transactions costs of time-of-day tolling are now very low. Ignoring the tolling option and letting crowding be the default rationing mechanism is then a policy failure.

But the travel times that we observe undermine the standard traffic doomsday talk. They also upend the "worsening traffic is a cost of sprawl" trope.

Employers and employees are (for the most part) finding ways to co-locate in ways that avoid both concerns.

Land markets (such as they are) are coming to the rescue of a policy failure.