Archive for July 3rd, 2009

Is this the end for people fumbling for dropped change on the floor of the car?

Reports the WSJ:

This weekend may mark the beginning of the end for toll-booth operators and plastic coin baskets, two institutions long associated with holiday traffic and highway congestion.

On Saturday, an authority that runs the E-470 toll road near Denver is ditching its coin handlers and going entirely cashless.

One curious thing about electronic tolls; they’re more expensive.

It is unclear whether cashless toll roads will have higher toll rates than ones offering a pay-with-cash option, but some theorists say higher rates are likely. Amy Finkelstein, an economics professor at the Massachusetts Institute of Technology, has analyzed 50 years of data for 123 toll roads. In a paper to be published in the August edition of the Quarterly Journal of Economics, Prof. Finkelstein suggests electronic tolling results in rates that are 20% to 40% higher than they otherwise would be.

One reason, she speculates, is that “when tolls become less visible, it’s easier to raise the tolls.” (but is it also that electronic tolls tend to be built on new, more expensive facilities, or ones more prone to congestion?)

Do economists have a word for this phenomenon? Something about transparency? Price elasticity? But it seems a strange anti-thesis to the anchoring effect, with no frames or anchors at all.

In a paper you co-authored on evaluating methods for identifying hot spots, you point out the “alarming” practice by safety agencies of using accident rates to rank hot spots. Intuitively, that would seem to be an acceptable method, but it performs very poorly in identifying them. Could you explain?

Another critical aspect of the relationship between safety and exposure is the changing crash severity distribution as VMT increases—this is true on road segments and at intersections. Clearly a fatal crash is more harmful to society than an injury crash which in turn is more harmful than a property damage only [PDO] crash. A research interest of mine is to improve and standardize how we incorporate crash severity into high-risk site identification.

From an interview with Simon Washington, the new head of Berkeley’s TSC. Well worth a read in its entirety.