Free exchange | Tragedies of the commons

The world is his parking spot

On the allocation of scarce space

By R.A. | WASHINGTON

I HAVE to say, I almost feel bad for the New Yorker's John Cassidy, who is currently being skewered by much of the blogosphere for writing a profoundly wrongheaded blog post bashing New York City's bike lanes. But it really is a doozy of a misstep. A brief summary: Mr Cassidy is unhappy with the exuberance with which New York has added bike lanes in recent years. He enjoys the use of his car and finds it convenient, and all those bike lanes are occupying space that used to be dedicated to free on-street parking. And that stinks!

Let me quote just one bit:

Part of my beef, then, is undoubtedly an emotional reaction to the bike lobby's effort to poach on our territory. But from an economic perspective I also question whether the blanketing of the city with bike lanes—more than two hundred miles in the past three years—meets an objective cost-benefit criterion. Beyond a certain point, given the limited number of bicyclists in the city, the benefits of extra bike lanes must run into diminishing returns, and the costs to motorists (and pedestrians) of implementing the policies must increase. Have we reached that point? I would say so.

This is where I stopped feeling bad for him: the part where he claims to take an economic perspective. I hate to belabour the point, but driving, as it turns out, is associated with a number of negative externalities (Mr Cassidy, being an economics writer, will know the term). When Mr Cassidy drives, he imposes a small congestion cost on those around him, drivers and cyclists included. Because he and others do not consider this cost, they overuse the roads, creating traffic. Mayor Michael Bloomberg had hoped to address this problem by adopting a congestion pricing programme in Manhattan, but he was unable to generate the necessary support. As a result, there are too many cars on New York's streets. From an economic perspective.

Cars also release several harmful pollutants. Ozone is produced when vehicle exhaust reacts with sunlight, and breathing of ozone "irritates the respiratory tract and causes health problems like asthma attacks, coughing, wheezing, chest pain and even premature death". The problem is particularly acute in big cities in the summertime. Cars also emit carbon dioxide, which contributes to climate change (an issue of some concern to a city composed primarily of a series of islands). Interestingly, New York City's per capita transportation emissions are remarkably low among American cities, largely because it has the lowest share of commuters in personal automobiles of any large American city. It would be possible to account for these pollution externalities, to some extent at least, by taxing them. But at the moment, fuel taxes are too low to cover road maintenance, to say nothing of the costs of automobile pollution. As a result, there are too many cars on New York's streets. From an economic perspective.

And of course, surface parking in Manhattan takes up some of the world's most valuable real estate. Mr Cassidy complains that it used to be easy for him to find free on-street parking in Manhattan during the dinner hour but isn't any longer. To give away valuable parking spaces for free is hugely inefficient. It encourages too many people to drive, and it encourages people to stay in free spots longer than the welfare-maximising amount of time. Economist Donald Shoup has written quite a famous book on this topic; I'm surprised Mr Cassidy isn't familiar with it. Mr Shoup explains that in addition to inefficient use of space, free parking encourages drivers to circle as they wait for a new spot to open, thereby adding to the congestion problem. And indeed, Mr Cassidy explains that he does just this, heedless of his impact on the traffic around him. To the extent that New York City still has free on-street parking, there are too many cars on New York's streets (from an economic perspective). Giving free spaces over to bike lanes helps rectify this situation.

Now, if drivers paid for all the costs they impose on others, then it might be worth asking what the optimal level of bike lanes to have is and discussing whether the lanes themselves are subject to rising congestion and need to be priced. Of course, if drivers paid for all the costs they impose on others, there would be fewer drivers complaining about bike lanes and more people using them. As things stand, given that cyclists help alleviate some of these externalities (a cyclist takes up dramatically less road space than a car, doesn't use on-street parking, does not emit ozone, and does not contribute to climate change) it seems quite sensible to allocate a larger share of New York's roadways to lanes for cyclists. From an economic perspective.

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