Sunday, January 8, 2012

Who said we actually need High-Speed Rail? What if we don't?

Attention all number-crunching colleagues.

This guy, Tim Worstall, has it right, and that's looking at the assessment of "social benefit" or personal benefit derived from going faster from point A to point B. Does it really make that much difference to spend billions and billions or high-speed rail?

We have noted in the past how the federal government has never conducted the kinds of cost/benefit studies that such massive investments as high-speed rail warrant.  At the same time, the CHSRA has continued to make outrageous claims for its rail program, not the least of which are "profitability." Another is that faster is better. 

But, to sell this monstrosity to us based on all the benefits that would accrue to HSR users is deceptive indeed.  The time differences by taking the HSR from San Francisco to Los Angeles, based on door-to-door comparisons, is not very large.  Actually, there are arguments that sustain the flying-is-faster contention, despite all the tie-ups at airports. And this certainly will be true now that we know from the CHSRA that they will not be able to meet the required 2:40 travel time; that it may be four hours long or even longer.

Personal travel is undergoing dramatic transformations caused by the advent of the Information Age and Information Technologies.  This is particularly true for business travel that in all likelihood would be the bulk of the travel market for high-speed rail were it ever built.  Corporate and business travel expense accounts would have a lot to do with that.

What I'm drawing from this discussion is not merely the possibility that we really don't need high-speed rail at all; that this only is the manifestation of the notion that faster is better mentality.  Which is to say, we've been sold a bill of goods.  What should also be apparent is that we better establish whether any passenger rail service at all is called for and whether it should be maintained and upgraded, or not.  

We certainly should separate regular passenger rail with speeds up to 110 mph from HSR with speeds at 220 mph.  Over the so-called optimal distances of 300 to 400 miles, has a case been made, or not, that regular passenger service would be more than adequate to meet demand? 

The most compelling reason for this distinction is cost; cost of construction and cost of operation. While we might be able to afford to upgrade existing Amtrak passenger service and introduce appropriate connections for the north/south trip to be made in less than a day, we have been assured that we cannot afford to build the projected zillion dollar high-speed train now on the drawing boards. 

Do we need a Rolls-Royce, built with public funds, to go to the supermarket? Perhaps not.  We won't actually know unless we conduct an open-minded examination of our transit needs and what is the most cost/beneficial way of meeting them.  And we haven't done that yet. 

TECH | 1/08/2012 @ 1:38PM
All High Speed Rail Programs Must be Cancelled and the Numbers Calculated Again
Tim Worstall
There are a number of proposals for high speed rail lines floating around at the moment. In the UK we’ve got HS2, California seems to be building one between two rural villages (although obviously the stated intention is to connect LA and SF) and there are those who agitate for more high speed rail right across the country.

Now, just for a moment, leave aside the larger arguments. About ridership, about how great it is to invest in infrastructure, about jobs created, carbon savings and even leave aside the way that the benefits always seem to be projected hugely high. Just leave all of those bits aside for a moment.

Take instead one little boring technical detail about how we work out the costs and benefits of such schemes. The costs, even though the estimations are usually out by a factor of between 2x and 10x, is in theory at least simple to measure. How much does it cost to buy the land, build a railroad and then keep it running?

The benefits, well, actually, they’re in large part the time saved by people because the trains are moving faster. They’re not stuck on a train so long waiting to get somewhere, they are somewhere faster and thus can do more.

When you look into the details of these calculations (this is certainly true for HS2 in hte UK and I would be absolutely astonished if it is different elsewhere, as this is the standard method) the standard value ascribed to the time is the average pay of the people doing the travelling. There is a low number ascribed to those travelling for leisure (for complex reasons we won’t go into here), a higher value ascribed to those travelling in regular, standard or second class and a higher value ascribed to those travelling in first class.

To make up numbers, leisure travel might be valued at £5 an hour of time saved in travel, work related but standard class £15 and first class at £50. While those are made up numbers they’re not all that far off the actual numbers.

The reason or this is that we’re trying to measure the extra economic activity that is going to happen as a result of the faster travel. That’s what gives the boost to GDP of having infrastructure after all, the increase in economic activity that comes about from having infrastructure.

Now, for decades, the standard assumption has been that while people are trapped in a metal tube travelling at speed (plane or train) they’re not doing any work. Thus reducing travel time increases the mount of work that can be done when they’re outside the metal tube.

However, is this actually true any more? As the UK blog “Idle” points out, no, it isn’t:

Time-saving necessity? 20 minutes, at HUGE cost per minute per punter; so huge, in fact, that the minimum ticket price for a one-way ticket on the Great White Elephant Line (trademark, Idle) looks like being £80 (in today’s money) when the thing finally gets rolling. This is, in other words, a line for people travelling on expenses. Businessmen and public servants, in other words. Or the carelessly rich. All of whom, obviously, have smartphones and tablets at their disposal to work in transit. The pro-HS2 lobby, unsurprisingly, provide their cost/benefit analysis on the basis that time spent on a train is time wasted. This isn’t so much stupid as plainly dishonest.

I’m willing to go with stupid rather than dishonest for now. For once the system for doing this sort of analysis is laid down it’s incredibly hard to get people to change it. But it must be changed and changed quickly before any more money is spent on any of these schemes.

We’ve had a technological change: time spent in transit is no longer wasted time, in fact if you talk to people these days I’m sure you’d find many of them claiming that sitting on a train, on a plane, with the internet running, is more productive than much time spent in offices.

I could put this in personal terms: I’ve just spent 14 hours of today crossing Europe, from one specific small town in Portugal to one small town in Germany. Which would I prefer, a 5 hour trip (possible if there were direct flights) or a 14? Obviously the 5 hour. But offer me, say, a 10 hour trip with good internet coverage or a 5 hour one without and I’ll take the longer one thank you. Because I know that I can work while travelling now.

But it really is true, that we need to cancel all of the high speed rail lines currently proposed and start all over again. Because recent technological changes, the way in which you can now work while travelling, have made all of the numbers we currently use incorrect.

I also think I know what the answer will be: if we reduce the value of the time saved from HST to just the comfort value of that time saved (broadly speaking this would be the same as the leisure value) and entirely ignore the higher value of lost working hours (because we’re not getting any lost working hours now) then no high speed transport system will pass the cost benefit analysis. Something, which of course, means none of them should ever be built.

This article is available online at: 

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