What City Observatory did this week

1.What HOT Lanes tell us about the value of travel time. The economic underpinning of claims that traffic congestion costs Americans billions and billions of dollars each year is the assumption that travelers would value time savings at about half their average wage rate, or around $15 per hour. But when given a chance to actually vote with their wallets, do travelers actually pay that much to save travel time? The adoption of High Occupancy Toll (HOT) lanes provides a natural experiment. Two researchers from the University of Washington and Louisiana State University have looked at the actual behavior of travelers on Seattle area HOT lanes and estimated that the willingness to pay for time savings works out to about $3 per hour. Travelers put a much higher value on reliability than time savings. These findings suggest that project’s ostensibly undertaken to save traveler’s time may not be economically justifiable.

2. How openness to immigration powers metropolitan economies. President Trump’s order closing the US border to persons from seven majority Islamic countries has produced widespread outcry as they conflict with fundamental American values and the constitution. But regardless of this order’s legality, the economic case for remaining open to immigration is powerful. America has flourished because its long been a haven to immigrants–many of them smart, entrepreneurial and refugees–who’ve helped generate new ideas and build new businesses. The data show that there’s a statistically strong relationship between the nation’s most productive metropolitan economies and those with the largest fraction of college-educated workers born outside the US.

3. Outdated “rules of thumb” distort our transportation planning decisions. Much of the policy making for transportation is clothed in the pseudo-scientific industry standards that measure levels of service, trip generation, lane widths and parking standards. But as we point out, many of these measures are out-dated, based on flawed data or analysis, or are simply biased in favor of promoting auto-mobility over other transportation modes and competing priorities.

4. Happy Groundhog’s Day, Oregon. Like many state’s and cities, Oregon has adopted an aggressive goal to reduce greenhouse gases–mostly in the far future. But with cheap gas and an uptick in driving, carbon emissions are actually increasing, meaning the state’s no longer on track to meet its modest 2020 goal, and stand’s little chance of reducing emissions 75 percent by 2050, as it law requires. Meanwhile, in the face of a big budget deficit, the Legislature is gearing up to pass measures to spend more money on expanding roads.

Must read

1. America’s Great Divergence. The increasingly apparent cleavage in American society and politics is along educational lines, argues Alana Semuels in The Atlantic. Her reporting highlights the very dissimilar geographies and life experiences of those who get college degree compared to their peers who don’t. She contrasts the fate of those living in rural Connersville, Indiana, where manufacturing is in seemingly permanent decline, with the relatively much stronger economy of Indianpolis, where urban revival and a growing set of amenities are attracting and anchoring talent. Along the way she weaves in research insights from Bill Bishop’s Big Sort and findings from Enrico Moretti’s research on urban economies.

2. Whither infrastructure? The early signs from Washington are that infrastructure might be the one policy area where the new administration may move ahead with a major domestic policy initiative. The University of Pennsylvania Institute for Urban Research has assembled short essays from eighteen of the nation’s leading thinkers on urban affairs about what the nation should be thinking about. Mark Zandi calls for broadening the definition of infrastructure to include affordable housing, predicting that housing supply will increasingly become a constraint on economic growth. Gilles Duranton argues that we need to shift priorities in transportation spending from building new capacity to fixing the infrastructure we already have. Bob Yaro urges more reliance on pricing, including eliminating the current federal limits on tolling existing Interstate highways.

3. One  more infrastructure viewpoint. David Levinson, the University of Minnesota’s iconoclastic “Transportist,” has also weighed in on infrastructure policy. He argues that massive investment in infrastructure at this point is bad policy, for several reasons. First, like other observers, he argues we need to shift funding to maintenance, rather that spending money on expensive “ribbon-cutting” projects. He also argues that funding and project selection responsibility need to be devolved to the local level because most benefits are local. In addition, because the economy is approaching full employment, there aren’t the slack resources to build new infrastructure the way that there were during the depths of the recession, and as a result, infrastructure will compete with and displace other investment in the economy.

New Research

1. Which colleges promote economic mobility. Raj Chetty and his colleagues at the Equality of Opportunity project have produced another stunning big-data analysis, this time tracking the economic outcomes of graduates of the nation’s college’s and universities. There work uses anonymized tax records to identify the family income of college students, by institution and then to track their post-college incomes. The results show which colleges serve students from throughout the income distribution, and which do the best job of helping their students rise economically. Among the institutions who serve the biggest fraction of students from the bottom quintile of the income distribution, and then see those students end up in the top fifth of the income distribution include  Cal State Los Angeles, the City University of New York (CUNY), and the University of Texas El Paso (UTEP).  The report provides data for every major college and university in the US, and gives us a much more detailed picture than ever before of who’s served and how graduates fare. A must read.

2.  Mandated parking spaces sit unused. Smart Growth America published a new report “Empty Spaces” looking at the actual levels of utilization of parking in five transit-oriented developments around the country. Their analysis shows that these developments generated between one-third and two-thirds as many car trips as predicted by the Institute of Transportation Engineers handbook (one of those deeply flawed “rules of thumb” we mentioned this week). Because so many more people used transit, walked or rode bikes than predicted, the parking spaces mandated by the handbook and local rules were significantly under utilized. Peak parking occupancy for these projects was between 19 percent and 46 percent of the levels predicted by ITE. The report is powerful additional evidence that parking requirements based on ITE standards lead to expensive wasted space. If we’re looking for regulations to reduce or eliminate, these would be a good place to start.