Valuing public transportation systems

Writing on electricity in Ontario, I’ve frequently argued the value of a watt is simply the value of the incremental cost of the watt it displaces – meaning vRES sources with no dispatchability and not expectation of production during peak periods are only worth the fuel displaced when they are producing.
This article argues public transportation systems have much higher value than generally recognized for the same reason – they displace traffic in the most congested areas, at the times of heaviest gridlock.

Energy Institute Blog

Econometricians and Hollywood producers have one thing in common: We make a living pitching cool counterfactuals. My whip smart (and recently tenured) colleague Michael Anderson has a new paper which answers the question of how congested LA highways would be in the absence of LA’s subway (and bus) system. The answer to this question is important, as transit systems receive large amounts of public funding and had previously been thought to provide little congestion relief since they account for only 1% of VMT nationally. The paper shows that the opposite is true. The intuition is simple:

“Transit is most attractive to commuters who face the worst congestion, so a disproportionate number of transit riders are commuters who would otherwise have to drive on the most congested roads at the most congested times. Since drivers on heavily congested roads have a much higher marginal impact on congestion than drivers on the…

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