Would You Pay $876 to Cut 6 Minutes Off Your Commute?

There were some mighty big numbers in the annual Urban Mobility Scorecard that the Texas A&M Transportation Institute and data company Inrix released Wednesday. Twin Cities residents, the study found, spent an average of 47 hours in 2014 stuck in rush hour congestion. That put us at 23rd among the 101 ranked metros. Washington, D.C., led with 82 hours. Los Angeles was just behind with 80 hours, and San Francisco followed up with 78 hours.

These delays have a cost, according to the study’s authors. For Minneapolis-St. Paul, they estimate that congestion cost the Minnesota economy $2.2 billion in 2014.

But it’s worth digging into the formulas a bit before throwing that figure around. The economic cost is based on the assumption that each hour in traffic is  worth $17.67 per person and $94.04 per commercial truck in lost economic activity, plus the cost of additional fuel burned.

The problem is that people don’t sit in congestion for hours at a time; they’re in congestion for a handful of minutes per commute in all but the worst cities. In Minneapolis, drivers are in congestion for a little over 12½ minutes per day, or a little over six minutes per rush hour trip.

Are Time and Money Commensurate?

In circumstances like these, money isn’t exactly equal to time because of the different ways they can be spent. Small amounts of money may not be worth much alone, but they can be collected over time and spent later on some larger purchase.

Small amounts of time aren’t worth much either. But unlike money, they can’t be collected over time and invested into something more meaningful. A teacher won’t be able to teach another lesson if the commute is shortened by a few minutes. A reporter won’t be able to write another article. A plumber won’t be able to fix another toilet.

The MnPass Example

Everyday people intuitively know money and time aren’t the same, and you can see this by looking at MnPass. The toll lanes save the average I-35W driver five to 10 minutes and have an average peak cost of between $1 and $4. The midpoint of that cost estimate works out to $892 per year, assuming a MnPass round trip every workday.

Meanwhile, the Urban Mobility Scorecard estimates congestion costs the average Twin Cities commuter about $830 a year through $17.67 per hour a person’s time is worth. It calculates that the average driver here burns about 18 more gallons of gas a year because of congestion, which works out to about $46.80 per year using the approximately $2.60 average at the moment. That total comes to $876. The cost and time savings aren’t exactly equal, but they’re close enough we effectively have a real-world experiment.

Drivers that have access to MnPass lanes can choose to avoid the congestion at approximately the same price as the study claims congestion costs them. If the study’s totals are accurate, we should see something close to an even split. Half the people making below the $17.67 average will decide that their money is worth more than their time and opt for the longer commute. The half making more than the $17.67 average will decide that their time is more valuable than the money they spend.

But that’s not what we see at all. In 2013, an average of 1,223 single occupants drove I-35W’sMnPass between 6 a.m. and 9 a.m. using a transponder (that is, they weren’t using the lanes illegally or for free as part of a car pool or bus ride). By contrast, I-35W north saw from 2,000 to 6,000+ vehicles each hour during the same period at just one point (north of the Minnesota River Bridge in Bloomington). People clearly are valuing the cost of congestion less than the study’s authors.

We see this same phenomenon anecdotally where states have been able to put up full-fledged toll roads. Numerous drivers are willing to trade time for money by taking side roads.

The True Cost of Congestion?

It’s not unusual for something to wind up costing less than the official “value.” After all, a product or service is only worth what people are willing to pay for it — as my dad reminded me whenever I was tempted by some collectible fad. With traffic costs, people simply aren’t willing to pay to avoid congestion to the extent that the authors predict.

This is not to say congestion is without cost. As with any annoyance, there’s a point where congestion becomes so great I’ll gladly pay to avoid it. There’s also a price point so cheap that it’s no longer onerous to pay. That’s why our discussions about transportation should focus more on finding the right balance between cost and convenience. If we focus only on convenience (or even only on cost), we’ll continue to have a distorted decision-making process.

At the top of this post are figures from the Urban Mobility Scorecard. I’ve taken the report’s annual time spent in congestion and converted it to daily and per trip times, based on the OECD’s estimate for the average number of hours worked per year in 2014.

How much would you pay to halve the amount of time you spend in congestion? How much would you pay to erase it entirely?

James Warden

About James Warden

James Warden is a former reporter who spent nearly a decade covering communities in Wyoming and Minnesota, as well as the wars in Iraq and Afghanistan. He’s now a Hopkins resident and member of the Zoning and Planning Commission. James works as a media analyst at Cargill. Views are his own.