I got all excited when I clicked on the link to this site (from an econblog I think; I can’t remember which for the life of me), which is, “dedicated to the study of urban spatial structures.” But then I started clicking through it and found, for example, this paper examining ways in which Atlanta might reduce pollution, and titled, “Clearing the Air in Atlanta: Transit and Smart Growth or Conventional Economics?”.

The author answers conventional economics, which you’d think would appeal to me, except that he applies it in a rather ridiculous way. Essentially he says that American cities are far too low-density to adopt transit as a means to reduce pollution. It’s also unreasonable to think that a shift in land-use sizable enough to make a difference would be feasible. As such, we should abandon all hope for those solutions and focus on congestion pricing.

Now, I think congestion pricing is a good idea. I also think it’s an idea which should go hand in hand with transit investment and land-use shifts. Why? Well, the author is careful to highlight the highly unusual spacial structure of sprawling American cities, achievable only through a persistent dismissal of relevant negative externalities, and with which the author is bizarrely enamored. But what do we suppose would happen if congestion pricing were widely adopted across these sprawling cities? Further, what do we suppose would happen if congestion pricing were widely adopted in an environment where gas prices were rising significantly?

In the short term, we’d see a large increase in the use of whatever transit was available. In the long term, we’d see spatial structures shift significantly. Exurban, low-density building would rapidly decline, and demand for centrally located housing would increase. In other words, the population would move toward those “infeasible” solutions previously discarded. Another way of putting this is: maybe our current settlement patterns aren’t actually sustainable.

This is a strange blind spot economists have, especially the libertarian ones. Congestion pricing is an excellent solution to many problems, but it is best pursued alongside a policy of transit and densification, and not as an alternative to those strategies.

Kevin Drum looks at some research with which I’m familiar and writes:

Standard economic theory predicts that this should lead to way more people getting college degrees, but that hasn’t happened. Altonji, Bharadwaj and Lange report that, when various socioeconomic factors are held constant, “the supply response to the increase in skill premia between cohorts was small: about 1% on average and about 1.5% at the median.” In other words, kids aren’t bothering to increase their skills very much even though the reward for doing so has skyrocketed.

He then goes on to speculate about why this is the case, wondering whether the slow growth of college wages has helped to reduce the behavioral response, for psychological reasons.

Well, maybe. But I think it’s more important to look at what the rest of that paper said. As it turns out, overall skill levels did increase between the two periods examined, but the increase was almost entirely due to an increase in parental skill levels. More educated parents have more educated kids. The number of highly educated parents rose between the periods examined, and so skill levels rose.

Kevin links to a Brad DeLong post, in which he addresses some of the issues involved before launching into an interesting discussion about what “the rules” of the success game might say about these factors. He writes:

Back in imperial China, if your parents could afford it…

And then continues on. But there’s no real need to continue on. The luck of the parental draw isn’t everything, but it is a lot of things. Childhood, and especially early childhood, is when you’re exposed to all kinds of behavioral patterns that will shape your actions for the rest of your life. It’s when you’re exposed to language and math or not exposed to it, as the case may be, thereby laying the groundwork for later intellectual achievement. Many deficiencies in these areas are identifiable by the time children arrive at school, and while they seem to be fixable in many cases with the right resources, we don’t often make the right resources available. Where and to whom you’re born is incredibly important.

But this should be common sense. I didn’t go to college because I compared potential wages and made a rational decision. At the time I applied to go to school, I had no idea what I wanted to do, and my conception of what different professions paid was wildly off base in any case. I was in no position to make an informed decision about how best to invest in my own education.

I went to college for three reasons. First, I had a vague sense that I wanted to be really successful and it seemed that successful people went to college. Second, my parents made certain that there was never any doubt about whether or not I was going to college–I was going to college. And third, the teachers and administrators in my life made clear that the grades and scores I earned were those associated with somebody who went to college. Essentially, college was what came next, as far as I could tell, and the grades I’d earned put me in a position where the institutions around me were committed to getting me there.

So yes, there are issues about what young people perceive success to be and what they think they should be doing, but these are small things. The big thing is to create a system that ensures that capable young people are getting the instruction they need and are guided to college. That means universal pre-K, it means ample resources available for remedial efforts, and it means addressing the time and financial constraints of lower income and single parents.

Kids don’t get themselves into college, for the most part, and thank god. If that were the case, no one would go. The environment around kids, and especially the parents, gets kids into college. So let’s stop wondering why teenagers aren’t acting rationally and investing for the long-term and using cost-benefit analysis and begin addressing the real educational needs in our society.

Can oil continue its upward climb? Well, consider this passage, from James Hamilton:

During 2006, China used about 2 barrels of oil per person. For comparison, Mexico used 6.6– Chinese oil consumption could triple and they’d still be using less per person than Mexico is today. The U.S. used almost 25 barrels per person. According to the data collected for a new research paper by Max Auffhammer and Richard Carson, there were 3.3 passenger vehicles per 100 Chinese residents in 2006, compared with 77 in the United States. Yes, I would say that these astonishing numbers for potential future Chinese oil demand are not at all inconceivable.

Even a significant slowdown in American demand growth–or an actual drop–will almost certainly be outweighed by large demand increases in China. While the average Chinese person earns significantly less than the average American, China is a large nation, and the number of Chinese people earning a developed nation wage is only going to grow. With those wage increases will come new oil demand.

China’s chosen infrastructure path–to invest heavily in highways–will only encourage this trend. The day when an electric car makes up a significant portion of the world’s vehicle fleet is at least a decade away. The bottom line is, even slow supply growth will not put much or any downward pressure on prices. And slow growth is the absolute best case scenario for supply.

That high American oil figure also suggests that despite years of declines in the petroleum intensity of American GDP, we remain extraordinarily vulnerable to continued price increases.

You know what I think our response should be.

Tom Bozzo writes at Angry Bear:

At ORD, they’re in the midst of blowing as much as $20 billion on a program to rearrange the airport in the modern fashion with multiple well-spaced parallel runways. Some of this may be justifiable in reducing operational issues in bad weather for the inframarginal flights, but a major justification was accommodating anticipated essentially unlimited growth in flights that someone projected out of past trend under the implicit assumption that cheap aviation, like cheap motoring, would go on forever.

Even half of that $20 billion would amount to an enormous investment in reasonably high-speed rail — Stephen Karlson of Cold Spring Shops argues persuasively that 300 km/h electrified bullet trains shouldn’t be made the enemy of very useful service capable of being implemented without such large investments in fixed capital. Since short-distance feeder flights congest big airports just about as much as long-distance jumbo jet services that may remain the efficient way to get people across oceans, you could theoretically de-congest hub airports to some degree with a well-planned investment in 180 km/h rail that would be a bargain in comparison to airport megaprojects, and provide more places with real modal choice in ground transportation essentially as a side-effect!

I like the comment that short flights congest airports as much as long ones. I’m of the opinion that a carbon pricing scheme would give a boost to rail travel over both driving and short-haul flying. But a potentially more important factor in some regions might be the runway congestion charges under consideration. I suspect that auctioned spots would tend to go toward long-distance flights, for which there are few good substitutes (question to the gallery: what are the high margin flights–where do airlines make their money?). Were that the case, demand for regional rail should significantly increase.

And Stephen Karlson is right; high-speed rail will be worth the investment on some corridors, but there are very large gains to be had for less capital simply by making minor improvements in speed, quality, and reliability on other routes.

Richard Layman went to a Virginia Transit Association conference. It seems he obtained some enticing information about transit in the commonwealth.

I noted earlier this week that Catholic University chose Abdo development to head up its south campus redevelopment. I’m very happy with this decision, being generally very fond of the work Jim Abdo has done in the area. Here’s the official post write-up, which sounds fantastic, and in which Abdo says all the right things. But of course, there are the obligatory anti-development voices at the end of the piece. I do realize that without a sense of community buy-in developing neighborhood properties becomes much more difficult. But honestly, to what extent should the opinions of folks who truly believe that Brookland should not significantly change from what it was decades ago, under entirely different circumstances, help to shape vital public policy?

But I suppose it’s all fine for them, seeing as they don’t have to bear most of the public cost of keeping those properties short or undeveloped.

There is a very bad line of argument to be found on the left which goes like this: we see that inequality is rising, and we recognize that the premium accruing to those earning college degrees is rising, but education differences cannot explain the huge jump in wealth going to those at the very top of the income spectrum, therefore those arguing that education is a source of inequality are mistaken.

Ezra offers a mild version of this formulation:

[I]t’s all evidence that the college diploma isn’t the cure-all it once was. Additionally, it cuts powerfully against the comforting story some tell themselves about inequality, which is that it’s skills-based and simply a reflection of educational differences in our grand polity. The massive gains in wealth in this country are apportioning to a small slice of rich people at the very top of the income distribution, not the broad mass of skilled, college-educated workers who hoped they were buying into the economic ruling class but, in fact, are just the new middle. We’ve built an economy where the riches go not to those with the most knowledge, but the most money.

Personally, I do not find the earnings gap between college graduates and those with less education comforting at all. I find it quite distressing, actually. I’m even more distressed by the fact that society appears to be polarizing–the proportion of young people earning college degrees is increasing, but the proportion of young people dropping out of high school is also increasing.

And I’m very concerned about the fact that parental educational levels strongly influence the educational attainment of children, which means, of course, that mobility is declining, and that the failures of our social and educational policies today will be felt for decades. And topping the list of my worries on this issue is the fact that the people who should be most concerned about this state of affairs are all too willing to brush it aside in order to complain about the soaring incomes of the very, very rich.

Inequality has multiple sources. Changes in the structure of the global economy and in tax policies have been extraordinarily good to the very rich. That deserves attention. It does not deserve more attention than the extent to which our blindness on education issues is contributing to an utterly broken social ladder and to a growing class of lower income individuals. The “skills gaps breed inequality” line is not some myth invented by the right to keep taxes low. They may use it in that fashion, but the problems underlying their arguments are all too real and deserve to be treated as such.

Higher fuel costs have been incredibly painful for airlines. Some have suggested that many of the models of air carrier profitability will have to be thrown out entirely. And now there’s this:

Financially strapped airlines are cutting service, and nearly 30 cities across the United States have seen their scheduled service disappear in the last year, according to the Bureau of Transportation Statistics. Others include New Haven, Conn.; Wilmington, Del.; Lake Havasu City, Ariz.; and Boulder City, Nev.Over the same period, more than 400 airports, in cities large and small, have seen flight cuts. Over all, the number of scheduled flights in the United States dropped 3 percent in May, or 22,900 fewer flights than in May 2007, according to the Official Airline Guide.

And the service cuts are far from over, as jet fuel prices rise, airlines shut down and companies consider mergers, like the Delta-Northwest deal.

For American travelers, the shift means that they can no longer bank on scheduling flights to reach their destination within a single day, said Robert W. Mann Jr., an industry consultant in Port Washington, N.Y.

“Everybody expects frequent, convenient, high-quality service with great connectivity to the rest of the world,” Mr. Mann said. But given the steep rise in fuel prices, which are up 84.5 percent from a year ago, airlines have to make difficult choices on service.

These middle distance, regional routes are often ideal for rail service. The fuel efficiency savings and reduced emissions are a clear advantage for rail. All that’s needed are investments to improve the quality and frequency of service. Let’s do get on that.

Speaking of transit money:

House Transportation Committee passed the Saving Energy Through Public Transportation Act (HR 6052). At a time of record high gas prices – Hartford and Chicago are in the $4 gallon range with the national average not far behind – the bill would authorize $1.7 billion in grant funding for public transit.

The bill recognizes that some 37 million metric tones of carbon dioxide are saved annually by the 10.3 billion public transit trips Americans took in 2007. And, as a daily public transit rider myself, I appreciate the estimated annual cost-savings of $6,251 (as per the American Public Transportation Association).

The grant funding is broken out thusly: $750 million for fiscal years 2008 and 2009 for urbanized areas and $100 million for non-urbanized areas.

Again, that’s not all that much, but it’s better to have it than not have it. And maybe political leaders will get in the habit of allocating money for transit and just keep on doing it.

But in selling this to voters, we should remember that while the carbon dioxide savings are important, this will give drivers a way to avoid high gas prices and choking congestion. Appeal to their (direct) self-interest!

(H/T)

I sucked in my breath a bit when I saw that Barbara Boxer’s amendment to the Lieberman-Warner climate bill set aside $171 billion for mass transit. Then I saw that that was over a period of 50 years. We can and should do better than $3 or so billion a year for transit, for climate reasons and others, too. And it would have been a real slap in the face had transit not been given a line item, since just about every other energy related thing in the country did.

I have to say, I’m not fond of this throw money at everything approach to the cap and trade plan. I recognize that some of that is unavoidable in trying to pass a piece of legislation that will potentially raise costs for a broad spectrum of interests. If I had my druthers, government funds would be set aside for things, like transit, where the positive and network externalities justify a boost. All other “adjustment assistance” should be returned to households or banked for when needs become apparent.

The government just isn’t all that great at picking winners, and as it is, we’re picking a lot of winners (most of which will end up losers). The effect of pricing carbon should be plenty powerful to generate needed investment. What’s more, the firms that survive these challenges in the absence of gobs of assistance will be the most innovative and flexible, which is good. But if we lard the bill with financial aid for whichever industries are best connected in Washington, then the firms that survive these challenges will be the ones that are best connected in Washington, which is bad.

Of course, the biggest potential problem in the bill is the “off-ramp” provision. Depending on how it ends up, that bit could essentially mean that whenever costs become high enough to create changes in behavior (suggesting that some business out there is being “harmed”) a bunch of new permits will be thrown on the market, rendering the whole thing useless.

The point of the bill is to put in place a pricing mechanism that will change what we do. If we can’t stomach that, then we may as well give up now.