The most brilliant thing written last week that you probably haven't read is a piece from Joe Cortright called The Cappuccino Congestion Index. It was actually written as an April Fool's joke but it is so dead on in its analysis that it deserves to be the topic of conversation for transportation reformers everywhere.
Some background. Back in 2010 -- the early days of this blog -- I did a five-part series on a TIGER grant project and the absurd math used to justify it. I had been vaguely aware of how bad it was because they had been used to justify projects I had worked on, but it wasn't until I was challenged and then dug into it that I grew to understand how deep the fraud is.
Essentially, accepted practice is to take small amounts of time saved by each individual driver, aggregate them together over a long period of time and then convert all that saved time into dollars. So if a project will improve your commute by 60 seconds, and there are 40,000 cars per day that travel that route, then the project will save 40,000 minutes of time each day. In a year, the savings is 243,000 hours and, if the project is expected to last 50 years, then the total savings will be 14.6 million hours. If we assume a person's time is worth $25 per hour, then we've just saved $365 million dollars. By this math It's really that easy to save tons of money.
Only it isn't money. It's time. And, despite the soothing assertions that politicians and lobbyists can obtain from economists, people don't actually value their time in this way. A minute stuck in traffic is different than a minute at work and is different than a minute spent watching television or tucking your child into bed. Of course, that is an inconvenient reality that is best avoided if your goal is to disseminate propaganda for building more highways, interchanges and stroads (and even rail lines). The lies we tell ourselves.
This is where Cortright's piece comes in and is just so brilliant. The Cappuccino Congestion Index applies this methodology to the line at the coffee shop, indisputably proving that a lack of baristas and Starbucks costs Americans a whopping $4 billion per year.
Based on our observations and of typical coffee shops and other data, we were able to estimate the approximate flow of customers over the course of a day. We regard a typical coffee shop as one that has about 650 transactions daily. While most transactions are for a single consumer, some are for two or more consumers, so we use a consumer per transaction factor of 1.2. This means the typical coffee shop provides beverages (and other items) for about 750 consumers. We estimate the distribution of customers per hour over the course of the day based on overall patterns of hourly traffic, with the busiest times in the morning, and volume tapering off in the afternoon.
We then apply our speed/volume relationship (chart above) to our estimates of hourly volume to estimate the amount of delay experienced by customers in each hour. When you scale these estimates up to reflect the millions of Americans waiting in line for their needed caffeine each day, the total value of time lost to cappucino congestion costs consumers more than $4 billion annually.
If you think this sounds ridiculous, you should be outraged at the math we use to justify highway spending. All those billions and billions of need comes directly from assertions no more absurd than this. As Cortright explains:
The Texas Transportation Institute’s best estimate is that travel delays cost the average American between one and two minutes on their typical commute trip. While its possible–as we’ve done here–to apply a wage rate to that time and multiply by the total number of Americans to get an impressively large total, its not clear that the few odd minutes here and there have real value. This is why for years, we and others have debunked the TTI report. (The clumping of reported average commute times in the American Community Survey around values ending in “0” and “5” shows Americans don’t have that precise a sense of their average travel time anyhow.)
The “billions and billions” argument used by TTI to describe the cost of traffic congestion is a rhetorical device to generate alarm. The trouble is, when applied to transportation planning it leads to some misleading conclusions. Advocates argue regularly that the “costs of congestion” justify spending added billions in scarce public resources on expanding highways, supposedly to reduce time lost to congestion. There’s just no evidence this works.
I've often contended that the clearest evidence of how this approach is a sham is its selective application. NOWHERE is it ever applied for things we add to the transportation system that creates delays. If Walmart wants that new traffic signal or some city wants a third interchange, we don't include in the cost of that improvement the small amounts of delay aggregated over all the people that will ever travel through the corridor. NEVER! Doing so would mean building less, an outcome that system advocates can't fathom. This is just one of the many ways our system is rigged to expand without any real consideration given to the metrics that matter: real demand, travel time, feedback loops, return-on-investment, financial productivity.
Cortright ties this together with far too much sense to have it lost on a April 1 hoax.
No one would expect to Starbucks to build enough locations—and hire enough baristas—so that everyone could enjoy the 15 second order times that you can experience when there’s a lull. Consumers are smart enough to understand that if you want a coffee the same time as everyone else, you’re probably going to have to queue up for a few minutes.
But strangely, when it comes to highways, we don’t recognize the trivially small scale of the expected time savings (a minute or two per person) and we don’t consider a kind of careful cost-benefit analysis that would tell us that very few transportation projects actually generate the kinds of sustained travel time savings that would make them economically worthwhile.
The thinking exposed in the Cappuccino Congestion Index is just another one of the reasons we have a #NoNewRoads mantra and have opposed all efforts to spend more money on this broken system. Reform must come before more money. If we don't reform this system now, we're just going to blow the little remaining wealth we have hastening our own insolvency.
Our transportation finance system embodies a 1950's mindset focused on expansion. We need a more mature 2015 mindset focused on getting more out of each dollar we spend.