Will people use more public transport if its available?

31 July, 2006

Many will not according to the survey reported in the SMH today.

It found 74 per cent of people in NSW are “mostly travelling by car”. Almost 60 per cent of all respondents would not travel more on public transport even if services were improved.

The poll of 1010 people, taken last week, found that only 13 per cent of people “mostly travel by public transport”. Another 13 per cent use public transport and car about the same amount. Of that 26 per cent, about 55 per cent said they would not catch public transport more often if services were improved.

…A spokeswoman for the Transport Minister, John Watkins, said the results “defy logic and experience”. Tens of thousands more people were travelling on trains as reliability improved under the new timetable and petrol prices went up, she said.

Of course “tens of thousands” more people is well within the 40+ percent of the population who would use more. Given that for large classes of people public transport may be awkward people with kids, disabled elderly etc 40% is probably a pretty good segment where improvements can be made.

The other point is what does the question about “if services were improved” mean? Is it existing services becoming more reliable or that there are more services? For me I would only use more public transport (I either walk or catch a bus to work) only if there was more routes to different places I want to go the quality of service is sufficient, just not the destinations. For others though the issue is time. If you want to work late there may be no services available.

As I discussed in earlier threads on public transport, the issue holding many people back is the fact that there isn’t the services not just the quality (although that’s an issue also). Most likely I think the survey is badly flawed as it’s not at all clear what it really means.


Toowoomba rejects recycled water

30 July, 2006

Unfortunately it seems that the scare campaign has won and the residents of Toowoomba have rejected the proposed recycling of sewage into their drinking supply with 61.6% voting no in yesterday’s referendum.

If this was just the residents of Toowoomba rejecting the most sensible option for dealing with their own problems then I would be inclined to say so what. However given the nature of politics and politicians this will be viewed as a test case for how other communities will react to such a plan and no doubt there will be others silently backing away from recycling proposals. As I mentioned in an earlier post, Sydney could quite cheaply use recycled water for about about 9% of its water usage, but even this modest amount was rejected in favour of the single big ticket solution of desalination.

Of course for non-coastal areas desalination is not even an option so somewhere along the line people are going to have to realise that in the driest continent on earth we are going to have to be a little more sensible about how we reuse our water. The only other option long term is to go for the sort of population cap that some Green groups would propose. Rejecting this is merely the residents sticking their heads in the sand and hoping their problems go away or someone else solves it for them.


Evolutionary Economics

25 July, 2006

Interesting article in The Economist (viewable for free) on evolutionary economics. The article mentions that Paul Krugman has been critical of the area but from my reading he’s not entirely opposed especially given he’s written a book about The Self-organizing Economy. His scepticism and how he sees it as being useful seems to be outlined in this talk he gave on What Economists can learn from Evolutionary Theorists. Which seems pretty well balanced even though I think he’s a little harsh on Stephen Jay Gould.

Anyhow I think there is a lot of value in the type of modelling described below, even if it’s not of the explicitly predictive kind. Certainly valuable qualitative knowledge and statistical relationships can be found by such modelling not to mention insight into how relatively simple relationships between groups of individuals can lead to incredibly complex behaviour and structures.

…more unsettling than the ideas are the techniques and tools Mr Beinhocker advocates. He argues that economists should abandon blackboard deduction in favour of computer simulation. The economists he likes do not “solve” models of the economy—deducing the prices and quantities that will prevail in equilibrium—rather they grow them “in silico”, as he puts it.

An early example is the sugarscape simulation done in 1995 by Joshua Epstein and Robert Axtell, of the Brookings Institution. On a computer-generated landscape, studded with “sugar” mountains, they scattered a variety of simple, sugar-eating creatures, which compete for this precious commodity. Some creatures move faster than others, some see farther, and some burn sugar at a higher metabolic rate than their rivals.

Surprisingly, the results of their myopic lives can be gripping. Even simple rules of behaviour result in collective patterns that are impossible to foresee yet easy to recognise. The sugarscape, for example, is quickly beset by a division between haves and have-nots, which bears a strong statistical resemblance to the distribution of income in real economies. These macro-results cannot be deduced from the micro-rules simulators write. Rather, they emerge from the interactions of the creatures in the model, just as “wetness” emerges from the interaction of water molecules, rather than being a property of the molecule itself.


Taleb on Randomness

24 July, 2006

One of the things I originally intended to blog on, as you can see from my early posts, was some of the issues related to complex systems and the unpredictability associated with non-normal distributions. Possibly because my ideas were too badly formulated I’ve made few comments on this as I wanted more time to consider rather than posting uninformed crap.

Anyway, I have been reading some of the work of Nassim Nicholas Taleb an ex-derivatives trader who runs a hedge fund, is a fan of Karl Popper and has published a book on the subject of errors people make in the face of randomness some years ago called Fooled By Randomness with another one on the way apparently. He is now an academic. I have the book on order and will let people know what I think in due course. Anyhow it seems that a major theme of Taleb’s work is the idea that the widespread use of the normal distribution in finance (and other areas but he’s a finance guy so this is his focus) leads to people persistently underestimating the possibility of rare events. Which leads to his attacks on the whole idea of calculating risk measures such as VAR not to mention option pricing.

His belief in this idea is strong enough that according to this New Yorker article, he runs a hedge fund who’s main strategy is to systematically buy options (never sell) on the basis that the market persistently undervalues the chance of big moves. Rather than try to make money in “normal” market conditions, and then get occasionally take a hit when Russia defaults on its debt or a major terrorist attack occurs etc, the strategy is such that you usually make a loss, but every so often you make a very large profit.

An illustration of the difference that the big moves make it this graph of the S&P with and without the 10 largest moves. If you fit a normal distribution to the time series you should never get these, and particularly not ten over this timescale. [ref]
SandPComparison
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Carbon Rationing

20 July, 2006

The SMH notes today that the UK intends to run a pilot scheme to ration carbon credits to consumers, complete it seems with a trading scheme for excess points.

The scheme states:

Some of the annual ‘carbon budget’ would then be distributed to individuals on a per capita basis for free, with the remainder sold or allocated to businesses and the public sector. The allowances or credits would then be surrendered whenever individuals or businesses bought carbon directly – for example, through purchases of electricity, petrol, gas, or fuel oil.

To allow flexibility, a market would be created whereby participants could buy and sell carbon credits, leading to the creation of a price for carbon, which would encourage energy efficiency and behavioural change, whilst stimulating the demand for low carbon technologies such as renewable energy.

Which is the natural extension of a Kyoto style Cap and Trade system put on to individuals. I guess it makes sense to impose these credits at the most obvious points in the cycle, eg when we pay for electricity or petrol etc, rather than when we buy a finished product which took electricity to make but can be put into the price.
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Economic models

18 July, 2006

An interesting article in The Economist this week about the value and problems of economic models. Its not behind a pay wall so go and read it if you are interested. I was going to put a juicy quote, but can’t really find a good one, but the whole article is interesting.


More about free public transport

18 July, 2006

I have been looking around a bit more about this topic and have uncovered a few interesting things. The first is this article in The Age earlier in the year touting the idea.

Free train, tram and bus rides would boost the number of trips by up to 30 per cent, ease traffic congestion, cut pollution and greenhouse gases, reduce road accidents, transform railway stations into activity and business hubs and generally make Melbourne a happier place to live, experts say.

It would cost the State Government about $400 million a year in lost revenue, but about $60 million would be saved each year by getting rid of ticketing machines. State subsidies already contribute about 60 per cent to the price of a ticket.

So collection costs around 6% of the the total cost, but still it would cost net $340 million dollars, which they are suggesting they can raise by a household levy of $100-200, which varies depending on access of the suburb to public transport. Which is great, except that its not only your starting location that needs be near public transport, but your destination as well. Perhaps a good way of making the people who have good access to public transport for both end of their commute fund public transport would be to actually make them pay a fare.

Another interesting argument on this is by the Public Transport Users Association, which, to my surprise given they are public transport advocates, came out against the idea.

It’s not the cost of public transport that puts people off using it. Just eliminating fares without improving services won’t shift the habits of enough people to justify the cost. But if service improvements can attract more people to public transport, we might as well maintain reasonably cheap fares so as to recover some of the cost.

…once you’ve made public transport free, the money for any additional services has to be found in government budgets. This means that the more well-used the system is, the more it costs the taxpayer – quite the reverse of the world’s best public transport systems, which come close to covering their costs (often despite relatively low fares) because they attract high patronage and hence high fare revenue.

The first point being that the cost is not really a barrier for most people, compared with convenience. To drive into the city costs more than the train so its already competitive if it’s convenient.
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