Why Traffic Is Actually A Real Estate Problem

July 8, 2013 in Daily Bulletin

With yet another post on the economics of traffic it would appear that many economists should instead have studied urban planning. Alain Bertaud explained why traffic is mostly a result of mis-allocated real estate:

  • A car on the street can consume anywhere between 14 and 65 square meters of street depending on the speed it is travelling at.
  • In cities these cars are occupying valuable real estate…yet they don’t really pay for the land they occupy.
  • This is, in part, the reason for traffic. If motorists had to pay the market price for the real estate they occupy while they’re driving, there wouldn’t be any congestion.
  • In parts of Manhattan, for example, roads take up 36% of the available land – since motorists don’t pay the market price for it, this valuable land is inefficiently distributed.

Read more over here.

Source: Urbanization Project

Via: Marginal Revolution