The Parking Garage Dilemma

I’ve been studying a lot of economics lately and have been intrigued by a field known as “Behavioral Economics.” While I am far from an expert in this field, from my understanding this area of study seeks to explain why individuals make many of the decisions that they do, based on economic theory. This field is rooted in the concept of “rationality” which assumes that individuals weigh costs and benefits when making decisions.

Being a student of economics, and this area in particular, has lead me to try to apply what I’ve learned to some areas of my everyday life. (It is really interesting, as you get into this area of study, to look at and analyze the different decisions that you make on a daily basis. Oftentimes, you will begin to notice that you subconsciously weigh the costs and benefits of decisions without even explicitly thinking about it.)

One such area that I have been wrestling with is the concept of where one should park in a parking garage. I’ve been working in downtown Louisville for the past two years and utilize a parking garage on a weekly basis. Honestly, as I drove into work, I didn’t put too much thought into where to park. I generally would pick the first open spot I could find, so as to limit the amount of time I would spend driving out of the parking garage.

If everybody behaved this way, this topic would be quite uninteresting. After a couple months of parking in this manner, however, I started to notice that cars would drive past me and other open parking spots and head further up the garage in search of other open spots. To be honest, I could not make sense of this decision. Why would somebody pass up perfectly good spots on, say the fourth floor, in order to obtain open spots on the sixth floor? It made no rational sense to me.

Although I didn’t put too much effort into solving this puzzle, it did stick with me and annoy me on occasion. Finally, I obtained some clarity on a day when most of the lower level spots were filled. I drove up to the fifth level and noticed that all of the spots near the elevator were filled. I kept driving past many open spots until I got to the sixth level and also noticed that all of the spots near the elevator were filled. Suddenly, it occurred to me – these people were not trying to minimize the amount of time spent leaving the parking garage, but were trying to minimize the amount of time spent walking to and from the elevator! While I was willing to sacrifice a short walk to the elevator (cost) in exchange for a short drive out of the parking garage (benefit), these other people behaved the opposite way.

(Since writing this initial post in December, I’ve been able to take an “Urban Economics” class, which deals with city structure, transportation, and many other issues, and has given me a few tools to more eloquently explain this situation. Here is a more bit of a more technical explanation of the situation:)

When thinking about the “costs” of travel, economists consider both explicit monetary costs, as well as time costs. These time costs can be further broken down into “access time” costs and “in-vehicle time” costs. Access time cost is merely the disutility that an individual undergoes in order to enter a vehicle (i.e. waiting for a subway, walking to a bus stop, etc.), while in-vehicle cost is the disutility that an individual undergoes during an actual trip (i.e. sitting in traffic, sitting in a crowded bus, etc.).

Generally, to decrease access time, in-vehicle time would have to be increased. For example for a light rail system to decrease access time, the operators would have to add stops to the system. These more frequent stops would, however, increase in-vehicle time for those who were already on the light rail.

Empirical research shows that people actually dislike access time more than in-vehicle time. So, most individuals would rather get on a vehicle quickly, even if the trips itself were to take longer.

This actually lines up consistently with my observations in the parking garage. While I tried to minimize my in-vehicle time by parking in the first spot I saw, these people who kept driving to upper levels were trying to minimize their access time by parking close to the elevators. Apparently, my “ground-breaking” observations can be very easily explained by existing economic theory. Nevertheless, I thought these ideas were worth sharing.

To wrap this up, economics is a fascinating topic and can be used to explain many seemingly confusing aspects of human behavior. I hope this post was interesting and/or beneficial to you.

//

If this post piqued your interest or if you believe that this is really too petty of a subject to be discussed, please leave a comment or send me an email. Thanks for reading!

Advertisements

The Second Amendment and the Right to… Hunt?

I was blessed to be able to travel over to England a few years ago. Among many other unique characteristics of this trip, my Father, Grandmother, and I were able to stay with a few hospitable English families during our travels.

These visits were largely pleasant and good natured but at one point a divisive topic came up. Out of nowhere, our kind, elderly host asked something along the lines of, “Why in the world do you all insist on owning automatic weapons? Couldn’t you hunt just as effectively with far less dangerous weaponry?”

We laughed the question off without really answering it, but in my head I was thinking, “If that’s what you think the Second Amendment is all about, your government has brainwashed you all very effectively.”

I kid to some degree but at the same time this is quite a serious issue. It is no secret that many tyrannical dictators have succeeded in their endeavors by disarming their subjects. Chinese dictator Mao Tze Tung blatantly admitted this fact when he said, “All political power comes from the barrel of a gun. The communist party must command all the guns, that way, no guns can ever be used to command the party.”

Nazi tyrant Adolf Hitler expressed similar ideas, “The most foolish mistake we could possibly make would be to allow the subject races to possess arms.  History shows that all conquerors who have allowed their subject races to carry arms have prepared their own downfall by so doing.  Indeed, I would go so far as to say that the supply of arms to the underdogs is a sine qua non for the overthrow of any sovereignty. So let’s not have any native militia or native police.”

This is not to say that all disarming of citizens undoubtedly leads to tyrannical behavior. However, it is far easier for dictators and tyrants to achieve their nefarious goals when they do not have to worry about resistance from their people.

This type of resistance against overreaching government was exactly why the Founding Fathers emphasized the right to bear arms. It amazes me when people say that the Second Amendment is “merely about hunting” or “was written with muskets in mind and doesn’t apply to modern guns.”

President Thomas Jefferson said, about this issue, “No free man shall ever be debarred the use of arms. The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government.” George Washington, Patrick Henry, George Mason, John Adams, James Madison, and many other Founding Fathers echoed this same sentiment repeatedly. The right to bear arms is certainly about self defense, but it also serves to dissuade government from despotic behavior.

Based on that idea and the fact that Colonial revolutionaries had weapons identical to the arms of  the British military of the day, one could make the argument that, rather than having their gun ownership limited, modern Americans should actually be allowed much greater access to military-grade weaponry?

//

If you have thoughts or questions on this important issue, please leave a comment or shoot me an email. Thanks for reading!

The Economic/Behavioral Effects of Bridge Tolls

Those of you who live in Louisville are likely very aware of the upcoming tolls on a few of our local bridges. Given the high amount of use that these bridges face in the Kentuckiana area, it will be interesting to see how traffic behavior changes with the introduction of these tolls. What exactly might be some of the changes instigated by these new tolls?

In essence these tolls will behave as a tax on the use of three of the five Ohio River bridges, raising the cost of travel via these bridges. (As a sidenote, a toll seems to be a more equitable way to pay for the costs of the bridge than increasing everybody’s state/local taxes, regardless of their use of the bridge.) All else equal, economists generally believe that an increase in price leads to a decrease in quantity demanded. Thus, it would make sense that traffic on these tolled bridges would decrease, as people try to effectively plan and limit their trips across the river.

Now the exact size of this decrease is a little bit harder to predict. One factor that effects the size of a decrease in quantity demanded, relative to an increase in price is the availability of close substitutes. The bridges not being tolled would seem like legitimate substitutes, meaning it would seem reasonable to expect traffic on non-tolled bridges to increase.

However, it will be interesting to see whether drivers traveling from (for example) downtown Louisville to Clarksville or Charlestown view the Sherman Minton Bridge as a legitimate substitute or if cost of the extra travel time would outweigh the benefit of avoiding the toll. If time is money, as the saying goes, than it seems reasonable to expect some people (especially high earners) to choose to pay the tolls and save time. People making less money, whose time is presumably less valuable (from a strict wage perspective) would likely be willing to endure longer travels for the sake of saving some money.

All that said, this is merely theory and there are most likely other factors that will effect commuting behavior beyond what I highlighted here. Hopefully, this post was helpful and thought provoking. It will be interesting to see how this change effects the city of Louisville and the surrounding area.

//

If you agree or disagree with the thoughts posted here or have additional thoughts on this issue, please feel free to post a comment or send me an email. I’d love to hear what you have to say. Thanks for reading!