Infrastructure Economics Basics

LTRs know all this and may skip. This is pretty simple stuff, but I run into it over and over again so I’ll summarize here.

There’s a basic principle of economics called Tradeoffs:

“Scarcity of economic resources forces people to make tradeoffs. That is, people must always consider how to spend their own limited incomes or time because resources are limited to satisfy their unlimited needs and wants. Tradeoffs or choosing a one thing means giving up something else. When we give up an item, we lose the benefits of its services to us or incur costs to obtain the benefits of the thing we decided to choose. Thus, making decisions requires comparing the costs and benefits of alternative courses of action.”

Althought this is super-duper obvious, we often act, while dealing with cycling as transporation as this were not true.

A notable example is the texting while driving ban. This law has not been shown to reduce accidents, but we are continuing to pursue it. A similar argument can be made with helmets.

That’s why it’s total nonsense to say “every little bit helps.”

No! Every little bit spent on you useless pet project times the population at large is a lot of wasted money that does not help.

Another notion which is totally ignored at times is The Law of Diminishing Marginal Utility:

“Economists sometimes speak of a law of diminishing marginal utility, meaning that the first unit of consumption of a good or service yields more utility than the second and subsequent units.[citation needed] The marginal decision rule states that a good or service should be consumed at a quantity at which the marginal utility is equal to the marginal cost”

This comes up in road projects a lot. People keep wanting to expand roads, which costs a ton of money, instead of building cycling infrastructure which comparatively costs little.

Comparing cycling infrastructure to road infrastructure is comparing apples to oranges because the roads are done, they go everywhere, while there’s no safe insfrastructure that connnects anything meaningful in San Diego to anything else.

So there’s a much larger payoff from building something for cycling rather than for motoring.

Finally, there’s a medical term known as Triage:

“Triage (play /ˈtriːɑːʒ/ (UK English) or /triːˈɑːʒ/ (US English)) is the process of determining the priority of patients’ treatments based on the severity of their condition. This rations patient treatment efficiently when resources are insufficient for all to be treated immediately.”

This means that we must deal with the most dangerous situations first. That is, to fix the deadliest areas first.

In the past, the design of infrastructure in San Diego for cycling almost operated in an opposite manner. This is because projects are built based upon “community input” which means that the most dangerous areas such as University Avenue are not fixed while we continue to build excellent cycle tracks next to the harbor and beaches where virtual nobody commutes.

With our new mayor, I hope that we toss out our emotional and consensus based models and instead move toward building infrastructure based upon sound economic and medical principles.


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