Missing the Point on High-Speed Rail

Ed Glaeser is a fantastic economist. He has done magnificent work analyzing the economics of urban growth and written indispensable papers on the connection between housing regulations and migration.

But when the man picks up his pen to write a piece for public consumption, he tends to take complete leave of his senses. I realize that this is a common affliction among economists, but Glaeser suffers from a severe case of the syndrome.

In a Friday piece in the Boston Globe, Glaeser takes on the administration's push to fund construction of high-speed rail corridors around the country. In doing so, he combines the cognitive failures of every amateur train hater with a serious lapse in critical thinking.

He begins by making two very valid points: transit agencies are currently suffering serious and unfortunate shortfalls, and transportation funding generally is allocated where it's least needed -- to states with low levels of population, population density, and congestion.

But then he rapidly goes off the rails. Glaeser writes:

Of course, Texas has four of the nation's fastest growing metropolitan areas, all within a few hundred miles of each other -- an ideal distance for high-speed rail. Austin, Dallas, Houston, and San Antonio are currently home to some 16 million people, and those metropolitan areas have added 3 million people since 2000 alone. Congestion is an issue within those metropolitan areas and will continue to worsen as they grow.

Not only is it entirely appropriate to build transportation infrastructure with future growth in mind, it's imperative. America's current sprawling growth pattern resulted in no small part from the mass construction of interstates and highways, which drew suburbanites to previously unsettled areas.

Moreover, Texan metropolitan areas are working to accommodate future growth in a denser fashion by building miles of metropolitan transit systems. Transit and rail are complementary technologies, each of which will increase the return on investment of the other.

Glaeser's errors continue.
He says:

But of course, so many people use these lines because they are effective, which is not only a function of congestion. Rail carries passengers between New York and Washington in fewer than three hours, while drivers couldn't manage the trip in fewer than four even without congestion of any sort.

In other words, causation between mode choice, density, and service quality moves in several directions. Better service would lead to higher rates of travel and increased density. In the pitifully funded corridors where intercity services average 45 miles per hour or less, it's no wonder that ridership lags.

He goes on:

This is a strikingly economically ignorant paragraph. Because Glaeser doesn't mention specific claims about the ways in which rail construction might affect growth, we can't argue against his first statement.

But as Glaeser almost certainly knows, transportation investment has multiple effects. Some of these shift the relative attractiveness of one area relative to another. Other effects improve absolute economic performance, by facilitating agglomeration, increasing potential scale, and allowing for greater specialization and intercity trade (of goods and services).

Glaeser's assertion doesn't pass a basic sense check. Has America enjoyed net economic benefits from construction of its roads, rails, canals, ports, and airports? Unquestionably.

Glaeser then channels his inner Randal O'Toole:

The case for subsidizing urban mass
transit, like the MBTA, is certainly debatable, but it is much stronger
than the case for subsidizing rail links between non-coastal cities.

The
MBTA’s core problem is that its operating expenses have always been
double its operating costs. To function, the system needs about $900
million a year in subsidies from taxes and local assessments, which
works out to slightly more than $2 a trip.

Amtrak also regularly faces a $1 billion gap between revenues and
expenses, including depreciation, but since Amtrak carries only 29
million passengers each year, the per-trip subsidy tops $30.