Bike-o-nomics: Economics of Bike Lanes

Photo Credit: The New Yorker

You think there is controversy in Portland about bike lanes? You gotta be kidding - just go to NYC and then you'll see what controversy is.  Start taking away parking in Manhattan and the gloves come off.  But it is interesting to witness erudite and intelligent economists (or at least economics reporters) discuss the merits of bike lanes.

So I draw your attention to this heavyweight match.

Round 1. John Cassidy of the New Yorker writing in his blog:

But from an economic perspective I also question whether the blanketing of the city with bike lanes—more than two hundred miles in the past three years—meets an objective cost-benefit criterion. Beyond a certain point, given the limited number of bicyclists in the city, the benefits of extra bike lanes must run into diminishing returns, and the costs to motorists (and pedestrians) of implementing the policies must increase. Have we reached that point? I would say so.

Round 2. Felix Salmon on his Reuters blog responds:

And so New Yorkers turn to other modes of transportation. Primarily, we walk, taking up very little space while doing so. When we don’t walk, we cram lots of people into efficient vehicles like subways or buses. And sometimes we bike, since doing so makes a great deal of sense in a pretty flat city where space is at a premium.

Driving a car, on the other hand, is an enormously expensive thing to do, with most of the costs being borne by people other than the driver.

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If indeed the limited number of bicyclists in the city was a given, then Cassidy might have a point here. But it’s not. Bike lanes attract bikes no less effectively than roads attract cars and the number of cyclists in New York has been growing just as fast as the city can create new lanes for them.

Round 3. Cassidy responds:

Some people like cars, some people like bikes, some people like both. Since there is a limited amount of space on city streets, trade-offs have to be made. In making such trade-offs, a democratic polity should take into account the preferences of motorists, who happen to be far more numerous, as well as cyclists. That is all I am saying.

Round 4. Justin Lahart in the Economix blog points to this piece of research:

Cycling is a form of exercise that can also be used as a mode of transportation if the surrounding environment facilitates such use. According to the United States Department of Transportation, 73 percent of adults want new bicycle facilities such as bike lanes, trails, and traffic signals. Using data from the 1990, 1995, and 2001 waves of the Nationwide Personal Transportation Survey, in addition to data from the Behavioral Risk Factor Surveillance System (1996-2000), I propose to analyze the effects of variations in the built environment in the form of urban sprawl and in real gasoline prices on cycling as a form of physical activity. Using bivariate probit and propensity score methods, I show how cycling can lead to improved physical health outcomes.

He goes on to estimate, according to Lahart, that $6 billion could be saved in health expenditures in the US through increased cycling - though Lahart does not say how much increased cycling and I don't have access to the paper beyond the abstract. It does bear mentioning that such things are very hard to pin down in data and as yet, it does not appear to have been published in a peer reviewed journal.

Then there is the humorous deconstruction of the debate by Adam Sternbergh in his New York Times Magazine blog.

And finally a little pithy snark from Paul Krugman.

See, we here in our little provincial Puddletown are downright civil by comparision!

Anyway as to the economics, I have to give thie decision to Felix Salmon.  The amount of on-street parking in Manhattan is fixed and with or without cycling the relative scarcity only gets worse every year.  How to deal with the problem is not to try and preserve as much as possible but get at the root causes - too much reliance on personal car transport.  Besides, there is an easy solution to the parking problem: more private garages.  To promote biking - an activity that has positive social benefits versus the negative social benefits - you need to share the fixed amount of space on NYC's roads.

Cassidy's suspicion that the cost-benefit analysis would not turn out in favor of biking is completely absurd in my opinion.  Felix Salmon is right about the endogeneity of bikes and cars (so you can't look at the welfare of current users, but of the future equilibrium of users), and when you take into account the social costs of driving and the social benefits of riding, I think Cassidy would be disappointed to learn that a good CBA would point to even more bike lanes than is currently being proposed.

Now, a word of caution, I am taking as a stylized fact that bike lanes cause more biking.  Though I believe this is likely true, I don't think it has been shown to be so.  Nevertheless, living in Portland convinces me that all of the infrastructure has helped create the biking culture and an attitude that biking is a reasonable transportation alternative.

I do award Cassidy the last word, however, as he signs off with this beauty which works as well here in Portland as in NYC:

Finally, thanks to the commenters in general for providing me with a handy guide to the cultural politics of the twenty-first century. I’ll keep a copy of it in my walnut glove compartment:

Bicyclist = Urbane, enlightened, sophisticate.

Car Driver = Suburban, reactionary, moron.