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Friday, February 29, 2008

 

What is I-70 After All?

The I-70 traffic-jams are a problem that all Colorado skiers are acutely aware of. As a skier myself, I have experienced this regular occurrence first-hand. On January 25, 2008, the Colorado Springs Gazette ran an article in regard to this dilemma. “Rush Hour Could Cost You,” by Chris Barge gives a brief overview one senator’s proposal for creating an incentive structure to relive the highway congestion during peak traffic hours.

Senator Chris Romer, D-Denver, proposed that skiers could be charged up to $12 for driving I-70 during the weekend rush hour. Romer explained that, “You’re just reallocation money from those who are time-sensitive to those who are price-sensitive, and that’s a perfect market-based solution.” Romer admits that most people will not be happy about paying for something that is currently free. For this reason he suggests giving a positive incentive to the people who choose to stay off the road during the most desirable times. For example “skiers who choose to go early or wait until after the rush could get a $25 check in the mail, or a coupon to spend that much at a slopeside restaurant while they wait out the afternoon rush. “

It is true that charging people to drive on I-70 will decrease the number of people who wish to be on the road. However, the problem is far too complex to be explained by a simple supply and demand graph. There are two main quandaries with Romer’s proposal. First off: is charging people to drive on I-70 an exploitation of a public good? I admit that I-70 is not a true public good. The space on the road is obviously rival as no two cars can occupy the exact same place at the same time. However, this interstate was paid for by taxpayer dollars and was intended to benefit the general public. Taxes are used to prevent free-riders. That means, in theory at least, that every driver on the road at rush hour has already paid to be there. By charging taxpayers to use I-70, the road is no longer a public good. Imposing a fee on drivers would make the road excludable, and therefore, a collective good. It may be economically more efficient to simply use price as a form of rationing for the highway in high demand. However, the struggle between efficiency vs. equity is impossible to overlook.

Secondly, Romer recommended offering an incentive to drivers who chose not to use the road during rush hour. This method of traffic reduction seems plausible at first and does not involve exclusion. However, offering a selective incentive for inaction has the potential to create a regulation nightmare. Romer envisions the ski resorts recording the time that each vehicle arrives and using that information to determine when the car was on the road. Gathering this data could be expensive and time consuming for the resorts. Would ski resorts willingly choose to bear the cost of solving a problem that is not their own?

Rush hour traffic on I-70 is a real dilemma. However, the unintended consequences of “fixing” the problem are equally real. Whether you are a skier or an economist, it may be worthwhile for you to ponder the implications of Senator Romer’s proposal.

Comments:
I think also that the road is excludable. I-70, seems to me, is only available to those who can drive at least the minimum, or 45mph. You certainly can not use the interstate for scooters or skateboards. So who is really paying for the use of the road? I thought that the tax dollars from the sale of gas and licensing fees paid for roads?
 
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