Wednesday, June 1, 2011
If You Build It They Will Come
You’ve heard this one from me before when speaking of expanding freeways. It may be a cliché, but it’s one that has some academic weight behind it. Two Canadian scholars have put out a study whose conclusion, basically, is: Roads cause traffic jams.
Their study will soon be published in the American Economic Review and it finds that building more roads or freeway lanes simply increases automotive demand.
The study (discouragingly) also concludes that building transit doesn’t do much good either. Transit opportunities may cause some people to choose the bus or the trolley, but that just frees up space on the roads… space that will be quickly filled by someone else's car.
The conclusion of Professors Gilles Duranton and Matthew Turner seems to be: Build as little road capacity as possible and maybe people will just stay home… or go someplace to which they can walk or bike.
Detroit Gets Small
American carmakers took a long time to get there, but a New York Times article tells us they have responded to the demand for small cars. Almost one in four vehicles sold in the U.S. in April was a compact or subcompact car. A decade ago it was one in eight.
The shift to small car production, along with wage concessions by the UAW, is credited with preserving jobs in the U.S. auto industry. And small American cars are no longer a joke. The Ford Fiesta is the best-selling subcompact in the U.S. Among compacts, the Chevy Cruze is second only to the Honda Civic.
Density Will Makes us Rich!
Okay, this story comes to some questionable conclusions. But click on the link and see if it makes sense to you. An essay on Grist.org cites new scholarship to support the writer's view that urban density is the ideal human condition.
I quote: “The more smart, skilled people you get close together, the more you reduce transaction costs and increase ‘knowledge spillover,’ which leads to commerce and innovation.”
The article notes that the top 100 metropolitan areas in the United States take up only 12 percent of the land but produce 75 percent of the GDP. But isn’t that what you’d expect? And not all of those metro areas are what I’d call “dense.” I’ll stop.
Recycling Metal from Electric Cars
It’s surely occurred to some of us to wonder what’s going to happen to all that nickel and cadmium when we have to dispose of electric or plug-in cars and their high-powered batteries. Now a report from the United Nations Environment Programme tells us less than a third of metals, globally, have a recycling rate of more than 50 percent.
Rates of recycling are especially low for specialty metals that are used in many emerging technologies, which include hybrid cars and wind turbines. Apparently, environmental progress comes at an environmental cost.
Would the Rapture Lower Rents and Home Prices?
About a week ago there was a lot of talk about Harold Camping’s prediction of the end of the world and the coming of Jesus. That caused a columnist for Daily Finance to wonder how it would affect the real estate market.
Most people assume that the rapture would cause all of us to either go to heaven or be obliterated. But some theorists have imagined that those who were not called to heaven would just be stuck on earth with other sinners.
What would be the effect of this reduction in population? Would you finally be able to afford that 5-bedroom mini-mansion because there would be so few offers on it? Read the column and use your own imagination.