Wednesday 30 March 2011

Chart of the day: Unmet demand for cycling in Southwark

Over the last five years, Southwark council has carried out surveys into the travel habits and preferences of pupils in 89 of its 111 schools. The survey records the mode of transport the pupils currently use to get to school, and asks them what their preferred mode would be. The chart below shows the results for bus, walking and cycling, with current rate on the left and preferred rate on the right.

Around 20% of pupils would like to cycle to school, but only 3% actually do. 

Tuesday 29 March 2011

Urban myths and the misuse of urban data

Following up my post about the mismeasurement of urbanisation in Egypt, I would highly recommend anyone interested in this area to read David Satterthwaite's article on 'Urban myths and the mis-use of urban data' (pdf).

Satterthwaite's article covers a lot of ground, including alarmism over 'out of control' urbanisation in Africa, the extreme paucity of census data in some areas, and problems in measuring city size and therefore various indicators of city performance. But I'm going to focus on his discussion of how the comparability of the UN's urbanisation statistics is undermined by the use of different definitions of urbanisation at country level. For example:
China’s level of urbanization in 1999 could have been 24 per cent, 31 per cent or 73 per cent, depending on which of three official definitions of urban populations was used. India appears to be a predominantly rural nation, but most of India’s rural population lives in settlements with between 500 and 5,000 inhabitants, which are considered as villages and therefore classified as rural; many more live in settlements with more than 5,000 inhabitants, which are still classified as rural. If these were classified as ‘urban’ (as they would be by some national urban definitions), India would suddenly have a predominantly urban population. 
And then there's Egypt:
in 1996, 18 per cent of Egypt’s population lived in settlements with between 10,000 and 20,000 inhabitants that had many urban characteristics, including significant non-agricultural economies and occupational structures. These  were not classified as urban areas – although they would have been in most other nations. If they were considered urban, this would mean that Egypt was much more urbanized, causing major changes to urban growth rates.
Remember that Egypt's central government had an incentive to systematically under-estimate its urban population, as granting city status to an area meant allocating it more funding and representation in parliament.  

The lesson here is that people should be careful about using data on cross-country comparisons, they should be extra careful when it comes to data on topics like urbanisation where there is no standard definition, and they should probably be extra extra careful about data that is produced by governments like Egypt's. After all, if your argument is that the Egyptian government is dysfunctional, then shouldn't you be at least slightly sceptical about the data that government produces?

Monday 28 March 2011

Game theory and the risks of cycling vs driving

I've been reading Richard Tay's short article from 2002 on "The Prisoner's Dilemma and Vehicle Safety". Tay uses game theory to examine the implications of different fatality rates for drivers of small cars and four-wheel drives (4WD) in Australia. He finds that even though smaller cars are safer in that a collision between two small cars is less likely to result in fatality than one between two 4WDs, drivers will tend to prefer 4WD because in a collision between a small car and a 4WD the driver of the small car has a much greater risk of death. In the language of game theory it is a classic prisoners' dilemma, set out in the box below (the relative risk rates are taken from Australian data).

I thought I'd try and repeat the exercise for the relative risks of cycling and driving in the UK. I got data on the number of miles travelled and the number deaths or serious injuries (KSI, standing for 'killed or seriously injured') from accidents involving bikes and/or cars from the Department for Transport's 2009 road casualties report (tables 1a and 23c respectively), summarised below.

Using the KSI rates we can produce a new version of Tay's table as follows:

There is a similar outcome to the one Tay found, but the relative risks are much more extreme. In a collision between a bicycle and a car, the bike rider is roughly 100 times more likely to be killed or seriously injured than the car driver (1988 divided by 17). But the risk of a fatality is twice as high for a collision between two cars as for one between two bikes*.

None of this is particularly surprising, I suppose - I think everyone knows that if you're going to be in a road collision, it's better to be in a car than on a bike. But it does show how everyone making that calculation means that as a society we choose a sub-optimal equilibrium - a world in which the vast majority of people drive and the overall risk of death or serious injury is higher than it would be in a hypothetical world in which the vast majority of people rode bikes. That hypothetical world may not be a reasonable prospect, but we could surely do with getting a bit closer to it. Since the relative risks in a bike/car collision are probably not going to change very much, significantly reducing the rate of collisions has to be the aim.

*Incidentally, I used KSIs rather than just deaths as there were zero deaths resulting from bike-to-bike collisions in 2009. 

[Update, 5th May - I've corrected an error in the table, but not one that changes the conclusions]

Saturday 26 March 2011

20mph zones and congestion in London

Cyclists in the City report that the City of London is considering introducing a 20mph zone. This could be transformative if it goes ahead, and not just because of the positive impact on road safety. A 20mph zone would probably also lead to less congestion, because road collisions are responsible for around 28% of congestion in London, and 20mph zones reduce collisions by an average of 37% (p. 50 here). There is little point ever going above 20mph in the City anyway, yet at the moment many drivers do accelerate sharply whenever there is a bit of open road ahead of them. Cutting out that kind of behaviour would be a small but significant step to a saner city.

Thursday 17 March 2011

Over-elastic housing supply

What with all the complaining that people like me do about there not being enough new house building to keep up with demand, it is easy to forget that there can also be such a thing as too much housing construction. If the housing market is working well, there shouldn't be a big problem - new supply feeds into lower prices and builders stop building. But, as the Economist said recently:
when it comes to the biggest house-price bubble in history, theory does not get you very far. In some places the boom was big enough and irrational enough to suppress price signals from lots of new supply. Instead, availability of land simply fed speculative activity, which has made the popping of the bubble much more painful.
Much of the pain is felt in the labour market. The speculative frenzy got lots of people building houses, and then suddenly the last thing anybody wants is a new house built. This is more or less what happened in Nevada, which resulted in this:

It was a similar story in Ireland and Spain - see the Economist story for all the gory details [1]. In all these areas and perhaps particularly in Ireland, there was an additional layer of damage to the government's finances, when the revenues from construction income taxes and new home stamp duty suddenly dried up, contributing to the fiscal black hole Ireland is struggling to fill.

So while it's probably not much consolation to the many, many people who can't afford to buy or rent somewhere suitable, we in the UK may have inadvertently avoided a worse recession through not building too many homes. But I wouldn't go hugging your nearest NIMBY just yet - even though we don't know where the sweet spot of optimal housing supply is, I'm fairly sure we're nowhere near it at the moment.

[1] The OECD have also picked up on the potential problem of over-elastic supply in this working paper

Wednesday 16 March 2011

Ed Glaeser at the LSE

Ed Glaeser spoke at LSE on Monday night as part of a tour plugging his new book, Triumph of the City. With his slightly ship's-captainy appearance, extravagant gestures and SUDDEN CHANGES IN VOLUME, Glaeser makes for an entertaining speaker and a great salesman for cities, which seems to be the role he has settled on.

His talk was focused on the central message of his book, i.e. the benefits of dense urban areas and the costs of anti-density policies. On the benefits side, he made a convincing argument that better communications technology makes cities more rather than less attractive places to work, because by making routine communications easier they increase the returns to the much richer face-to-face form of communication. This is more true in some industries than in others, and one in particular: Glaeser says "There is no industry in which knowing a little more is worth a lot more than in finance", so for better or worse we shouldn't expect financial services to lose their dominant role in New York or London any time soon.

Another key benefit of density, which after all is just proximity in another guise, is that it allows people to save on transport costs. This, said Glaeser, is the main reason why you tend to see so many poor people in big cities. Their housing costs may be high but their transport costs are low, on top of the greater economic opportunities on offer. So maybe the high measured levels of inequality in cities isn't such a bad thing: in fact, Glaeser declared that there is "more of a problem in the artificial equality of suburban areas than in the inequality of urban areas", which is certainly something to chew over.

The economic benefits of agglomeration have always favoured cities, but high population densities can bring significant costs, most notably in terms of disease, congestion and crime. Life expectancies and general health used to be much worse in cities like New York and London than in the countryside, but thanks in large part to huge public investment in sanitation (and, I would argue, transport improvements that reduced overcrowding in the very centre) the gap has closed and in some cases reversed. Public health is still a huge problem in some of today's megacities, but Glaeser is convinced that similar investments can make all the difference.

Cities in rich countries are today generally much safer places than they used to be, with crime levels having fallen in most countries since the 70s and 80s. Glaeser noted that workers used to effectively get a 'real wage premium' for enduring New York's awful conditions, but now it is the other way around, with people willing to pay huge prices for the privilege of living in formerly bohemian areas like Greenwich Village.

At this point Glaeser had some criticism for Jane Jacobs, who he thought was unduly hostile to densification in her Greenwich Village neighbourhood and places like it. When Jacobs lived there the Village was an attractive, human-scale, organically 'mixed community', and Jacobs wanted it to stay that way. But Glaeser contends that a lack of sufficient new housing supply meant prices in nice, central places like the Village went through the roof, with the result that it is now a profoundly un-mixed community where only hedge fund multi-millionaires can afford to live.

I've got a few comments on this last issue, as I think it's fairly critical for cities like London which are trying for economic growth without excluding the poor and middle classes. The first is that it seems to be more or less impossible to preserve both affordability and the existing neighbourhood built form in the face of strong housing demand: you've got to choose one or the other.

The second point is that the relationship between the two is unstable - after all, if the reaction to a big increase in demand for housing in, say, Islington is to build a huge number of flats, then it isn't the same place it was before and a lot of that demand may disappear, potentially leaving you with a supply overhang and a less attractive environment. That's probably an extreme example as housing supply is never that responsive, but the point is that economists don't seem to me to have a good handle on these interactions as yet.

Lastly, it's fine to argue that places like Greenwich Village shouldn't have made the mistake of restricting new housing supply, but that doesn't answer the question of whether it is possible to undo the 'damage' now that it has become an enclave of the super-rich. Is there really any chance of persuading such a group of local residents to accept major structural change to the area they have paid so much to live in? This matters because if the answer is no then new supply won't be in areas like the Village but in less desirable places, probably more distant from where people want to be. If that's the case, then the very attractiveness of cities may undermine some of their economic and environmental benefits.