What is the financial cost of an automobile to the owner & to society?

Great Debates
1

In her 1998 book Asphalt Nation: How the Automobile Took Over America and How We Can Take It Back, Jane Holtz Kay states the following – Chapter 6, “The Cost of the Car Culture,” pp. 120-121:

Notes at the back of the book give the following cites for these figures:

All seem straightforward but that last one – I could find nothing to that effect by searching Environmental Defense’s website. Does anybody know where reliable figures can be found? And, have the relevant figures changed since 1998?

(Really a GQ question, but it’s bound to be controversial, so I put it in GD. Mods, move if you think appropriate.)

2

You’re not going to get any good answers, because it’s an indeterminate question.

Direct monetary costs are one thing. You can easily figure that out (although the authors are being disingenuous by using a 2-year old car as an example - they should be using the median cost across the fleet, which is much lower). Working out externalities is much more difficult, and bound to be a one-sided calculation by whoever has an axe to grind. For instance, anyone who seriously counts the added police required to police a suburban population as an externality of auto ownership is off his rocker. There is no way to directly link the two, or to know what the policing needs would be if everyone were packed like sardines into the city (or whether people would choose to live like that even if they didn’t have a car).

And if you’re going to go way out on a limb to add up negative externalities, you’d better be willing to add up the positive ones, too. What’s the value to society in having an extremely mobile population? How much more productive are we when we have the ability to move around as we do? How much more usable land was opened up because of our ability to move about off of public transportation routes? How much cheaper did that make factories and other business operations? How much more efficient is our transportation of goods, our emergency facilities, etc due to the existence of a large public road network which wouldn’t exist without the personal auto?

It’s flatly impossible to work back from today and try to figure out what society would look like without the car and whether or not that would be a net benefit or drawback.

But we can tell one thing - people LIKE driving cars. It gives them added utility, or they wouldn’t buy them. This is value that would be taken away if you used force to eradicate the automobile. THAT is a cost that has to be factored into any equation.

3

I’ll have a think about where to get some numbers. I disagree with Sam Stone’s fine post. It’s a hard question, but I very much doubt the best guess is net zero external marginal costs in urban areas.

It’s marginal not average costs that are relevant for the question of whether there are too many cars, which makes the book’s calculation IMHO uninteresting. The question is surely not “no cars” or “current numbers” - it’s whether there more or fewer than the optimal number of cars.

The positive effects Sam points to are real but I think they’re irrelevant either empirically or as a matter of economic theory:
What’s the value to society in having an extremely mobile population? **
Probably important historically in the US. At the margin? Probably zero.
How much more productive are we when we have the ability to move around as we do? At the margin, probably zero. Factor in congestion from the marginal vehicle in urban areas and this is a negative, not a positive.
How much more usable land was opened up because of our ability to move about off of public transportation routes? Sunk benefit. Irrelevant.
How much cheaper did that make factories and other business operations? Sunk benefit.
** How much more efficient is our transportation of goods, our emergency facilities, etc due to the existence of a large public road network which wouldn’t exist without the personal auto? Sunk benefit. Irrelevant for rich, urbanised countries. Likely pretty damn important for poor countries.

Congestion and pollution costs are probably substantial at the margin.

4

We really need to look at the benefits of returning to horse-based transportation. Convenience, mobility, ears to scratch behind and intangibles like a much more fertile garden.

We can grow all our own hay and carrots and be energy independent.

5

Only in the sense that fish LIKE to swim.

6

Hawthorne: My point was not that there were no negative externalities, my point was that when you start counting things like the cost of policing suburbs, you have to look at the positives. Many of the things Brainglutton listed are also zero at the margin or sunk costs.

7

The “positives” are a red herring here. There are “positives” to my owning a computer, but the purchase price is the purchase price and monthly access to the Internet has a definite cost. If for some reason I were not certain of the total cost and wanted to work up an estimate, any estimate of the financial value of the positives would be completely irrelevant to that calculation – not irrelevant, certainly, to my decision to own a computer or not, but irrelevant to calculating the costs. Likewise, the net economic benefits of widespread automobile ownership and the public infrastructure that makes that possible are irrelevant to calculating what each privately owned automobile costs society.

8

But if I told you that one of the ‘costs’ of owning a computer was that it was taking time away from work, then to be fair I’d also have to count added productivity of the computer as a benefit.

When you count things like ‘land consumed by sprawl’ as a cost of the auto, you’d better add in benefits like “increased utility of land”. Otherwise, you’re skewing the calculation.

9

Yeah, agreed. I was just pointing out that adding those things up isn’t all that interesting.

10

How do you calculate “increased utility of land”? By price alone?

11

As others have said, looking at the costs is only looking at one side of the equation. To have a discussion about whether the automobile is good for society, you must also look at the benefits. The author cited in the OP is clearly only concerned about the damage caused by automobiles. That’s fine if you only want to focus on that, but there is no reason we should pay attention to him in terms of public policy. If you are solely looking at the cost of the automobile then that says nothing about its real-world usage.

As someone who spent most of my adult life without a car, I am acutely aware of both the costs and benefits of owning one. If you live in the downtown of a big city near public transportation (as I did), you can do pretty well and the cost of owning a car usually outweighs its benefits. If, however, you live in a somewhat rural area outside a small town (as I do now), the cost of an automobile are certainly outweighed by its benefits. Yes, I now have a car payment and insurance and must gas up the car and take it into be serviced. I spend a lot on the car, but the benefits I receive from being able to get where I need on my own schedule are worth those costs. To ignore that is to engage in the most superficial of public policy analysis.

12

But this thread is about finding a reliable figure for the costs. Which should, in theory, be possible.

13

OK, but what’s the point, then? It seems pretty worthless to look at only one side of the equation.

14

For the NET costs. Clearly, the thesis of the OP is that the car is a net liability and we’d be better off without it. Or at least, we’d be better of with fewer of them. As evidence of this, the author lists a bunch of dubious ‘costs’ of the auto, and neglects to list any of the benefits.

We should all stop using water. Think about it - think of the costs from all the plumbing. Thousands of people per year drown in it. We’re depleting aquifers. Having to locate cities near water supplies denies us the use of other land. Having water piped into the home increases your insurance costs. Heating water for tea costs energy and increases global warming.

Water: Just say no.

15

A clearly important thesis, and one we cannot even begin to evaluate until we properly assess the liability-only side of the equation.