The Economic Benefits of Mass
Transit in Inter-Metropolitan Markets
October 1, 2004
The Magplane system if built between Boston and New York would allow Bostonians to work in New York and New Yorkers to work in Boston. Operating at speeds of 250 miles per hour, the commuting trip would take 46 minutes, a trip time comparable to a long distance subway ride in New York City. The Magplane system would also be able to emulate the affordable travel cost, convenience, and reliability of mass transit systems.
Such a transportation system would link the labor forces of these two great metropolitan regions to create a common labor pool benefiting employers of both New York City, financial capital of America, and Boston, a technology leader.
In the last 30 years, most or all High Speed Rail benefit cost studies have evaluated the benefits of HSR against the capital cost of construction. In almost every case, the benefits were calculated based on motorists and air passengers being diverted to this new transportation mode. Congestion relief, energy savings, and time savings formed the bulk of the economic benefits. Induced demand, which is the generation of new traffic, added only marginal economic benefits. And about 10 years ago, transportation consultants also calculated environmental benefits accrued from green-house-gas emission reductions. This too provided only very marginal benefits.
Structurally, all of the ridership studies were unable to examine the possibility of induced demand, defined as additional trips generated by providing a new transportation service that increases accessibility to new origin and/or destination points.
As a result of this approach, the net economic benefits of improving transportation between metropolitan regions are underestimated. As well, the nature of the economic benefits for intra urban or mass commuting is not correctly addressed. This is an extremely important factor if we want to build a transportation system that is able to convert existing inter-metropolitan travel markets into time, cost, reliability, and convenience equivalent mass transit markets and, by so doing, increase the productivity, competitiveness and economic growth of linked metropolitan regions.
For example, if as a result of a transportation system that can expand the labor catchment region of an employer in downtown New York to include the labor market of Boston, the economic benefit of an Bostonian being employed by a New York employer is not limited to the new commuter trip only, but may also be extended to include the productivity gain and increased competitiveness of the New York employer and, by extension, of the New York urban economy. Employer benefits are not generally recognized by conventional inter-metropolitan transportation benefit-cost studies.
In the intra-urban or mass transit market, the economic benefits to employers are generally understood and can be calculated. A demonstration:
The Christian Monitor newspaper did a story that calculated the economic cost of a strikebound New York Subway system a few years ago. It appears that the annual economic benefit ($127.75 billion) of the New York Subway system almost matches the replacement cost of building the system ($144 Billion).
According to the media story, “No subway? New Yorkers devise Plan B commutes”, the daily economic benefit of the MTA Subway is anywhere between $100 million and $350 million, providing an annual benefit range of $36.5 to $127.75 billion. While these estimates may include seasonal effects such as lost retail sales during the Christmas season, they nonetheless provide an estimate of the benefits of mass transit in New York City, a municipality with 8 million people. The per capita daily benefit is between a high of $43.75 to a low of $12.50.
In New York City, some of the subway system is below ground and some above. They used the cut and cover method, rather than tunnelling, to build it 100 years ago. So one can use a per mile unit cost of $200 million to estimate the replacement cost. But you could also double the cost to $400 million per mile (reflecting NYC conditions) to get an upper range of $288.8 billion.
New York City Subway Benefit Cost Comparison |
||
|
|
Annual Benefit |
Replacement Cost |
|
Low Return |
$36.5 billion (low range) |
$288.8 billion (high range) |
|
High Return |
$127.75 billion (high range) |
$144.4 billion (low range) |
Along the Boston – New York City corridor, if a dual track mass transit system like the Magplane were to be built, the length of the guideway would be about 215 miles. Using very conservative estimates, such as high unit costs ($55 million per mile) and low per capita daily benefits ($1.25) which is a tenth of the benefits New Yorkers receive from the subway system, the cost of capital construction could be repaid in about one year.
The Magplane New York City - Boston Corridor Comparison |
|
Annual Benefit(25.8 Million Population) |
Cost$55 million per mile |
|
$11.5 billion |
$11.85 billion |
These benefits can only be realized if a maglev system like the Magplane is able to emulate the speed of intercity transportation services while matching the cost, travel time, convenience and reliability attributes of the New York Subway system.
This story provides only rough order of magnitude estimates for both benefits and Magplane construction costs. However, it highlights the necessity of developing a proper benefit-cost analysis to evaluate correctly the benefits of transportation technologies like the Magplane that are able to provide inter-metropolitan commuting services.
Source - http://www.csmonitor.com/2002/1213/p02s02-ussc.html