Utopia postponed - blame housing?

Owen Hatherley asks why those of us with jobs are still working so much when we have so much labour-saving technology. He doesn't get anywhere near a decent answer, and overall it's not a particularly good piece, what with the erroneous claim that the average Briton works a 12 hour day and the suggestion that all service jobs - including Owen's? - are "pointless". But it's an interesting question (go read Keynes), so here's my attempt to answer it.

Let's look at it in terms of supply and demand. More about supply later, but for the moment I think we can all accept that technology improvements have vastly increased the amount and quality of stuff we can afford. Most of us could probably work part-time and have a quality of life - certainly a life expectancy - that most of our ancestors would envy.

Yet we generally choose not to work short hours, and in part that's because we want a much better quality of life than our ancestors had. Our incomes have increased hugely in real terms, but so have our demands for goods and services. In economic terms, most of the stuff we want consists of 'normal goods', i.e. stuff we are willing to spend more on when our incomes increase. It's not clear, however, to what extent this all really makes us happier or to what extent we are just on a 'hedonic treadmill'.

But do we want more stuff for its own sake or because we want to show off to everyone else? Do we desire goods and services for their inherent consumption value or for the social status they impart? Social status is a positional good, something which we value according to rank rather than absolute quality - even if we could all have afford to have good lives, only one of us could have the best, and that seems to matter to us. It does of course help, but only a little, that we don't all share the same subjective rankings.

On the supply side, it obviously matters how the things we want are made. One important aspect is whether the production process is labour-intensive or not. Things that are easily mechanised have generally got a lot cheaper compared to our incomes over time, but things which require a lot of human labour, such as hairdressing or adult social care, have not. That's because you have to pay someone to do it and other people have high income demands just like you do.

I would suggest that the housing market combines many of these features, and may be the most important reason why we continue to work long hours. Housing demand is income-elastic: when we earn more we often spend it on bigger houses or better locations. Housing is positional in the sense of social status (one of the great things about a nice home is inviting people around to envy it entertain them) and in the sense that it is spatially fixed: each home gives us access to a different bunch of locational goods, which in some cases like access to a particularly good school may be extremely valuable. And housing production is intensive in two expensive and relatively scare factors of production: labour and land.

Certainly housing could be cheaper if we built a lot more of it, but I'm not sure whether it would be cheaper in absolute terms (i.e. we'd spend less on it) or in relative terms (i.e. we would maintain our level of spending but get more for it). Either outcome would be an improvement on what we've got now, but not necessarily in terms of fewer hours worked.

Rising cycling casualties: policy needs to catch up, and fast

We had new statistics on road casualties in 2011 at both national and London level yesterday, and in both cases the figures on cycling make for grim reading. The number of cyclists killed or seriously injured increased from 2010 levels by 15% nationally and by an even worse 22% in London. As the chart below shows, fatal or serious cycle casualties in London are down over the long term but up sharply in recent years.

Naturally people are interested in what this means for the rate of cycling casualties per trip or mile cycled. Some other DfT figures released yesterday indicate that miles cycled nationwide rose by only 2%, which implies a large increase in the casualty rate (see road.cc's number crunching). TfL will probably not release statistics on cycle trips in 2011 until their next Travel in London report (probably just after Christmas) but I don't think anyone seriously expects cycling to have grown more than 22% in a single year.

And anyway, even if I'm wrong and cycling levels were up by more than 22%, would that make such a large increase in the absolute number of casualties okay? To illustrate the point, say the number of trips cycled in London grew by 25% each year for five years and the number of cyclists killed or seriously injured by 20%. Going by TfL's figures for 2010 from this report and assuming everything else stayed the same, then by 2015 we'd have 1.5m cycling trips a day, a modal share of 6%, a lower cycling casualty rate BUT over 1,000 cyclists killed or seriously injured a year. Should that really be considered a success? 

Of course that's a slightly unrealistic scenario, but the point is that cycling casualties are rising at an alarming rate, in part because more and more people are choosing to cycle (for whatever reason). We all like to see cycling growing, but if it is not to result in truly horrific numbers of deaths and injuries then we need a complete transformation in cycling conditions in this city. 

Fortunately there is, on the face of it, a political consensus around this issue, as in the run-up to the 2012 mayoral election every major candidate endorsed the London Cycling Campaign's 'Go Dutch' manifesto, which entails dropping our current approach to road design and embracing the Dutch ethos, including high-quality segregated cycle lanes on busy main roads. So really there should be no debate about the general principle of what do do, just about the details of how to do it. I hope the forthcoming London Assembly transport committee inquiry into cycle safety adopts this approach.

Of course Transport for London and various individual politicians will say that it can't be done in London because we don't have the space on our roads. But I think these latest casualty figures show that we have no choice but to make the space. To turn the old slogan on its head, we haven't built the infrastructure but the cyclists are coming anway, and as a result they're getting killed or injured in greater and greater numbers. They have forced the issue, and policy has to catch up.

Homeownership and growth in the great recession

There has been a bit of a discussion going round about the link between home ownership rates and national prosperity - see Marginal Revolution, Matt Yglesias and Melbourne Urbanist.

The upshot is that when you look at the data, home ownership rates seem at best uncorrelated with prosperity at national level and possibly even negatively correlated. Lots of poor countries have very high levels of home ownership while at the other end you've got countries like Switzerland and Germany, who seem to have got by pretty well with ownership rates of less than 50%.

Part of this pattern, in Europe at least, is explained by the fact that many post-Soviet countries simply handed over ownership of public housing to the occupiers en masse as part of their economic reforms in the 1990s, instantly creating very high rates of home ownership.

But another big part of the explanation is that wealthier countries are more urbanised, and higher rates of urbanisation mean lower rates of home ownership. Big, dense cities are great wealth creation machines, and higher-density housing is more likely to be rented than owned, partly for reasons of population transience and partly for reasons of efficiency - owning an apartment is a risky business because you are so affected by your fellow building occupants, so it often makes sense to let one landlord own the whole building and absorb all those inter-apartment externalities.

Lastly, Andrew Oswald has argued that higher rates of home ownership impede the labour market by reducing mobility (because selling a house and buying another is generally more costly than moving between rented houses), thus lowering long-run economic growth. Argument still rages over this theory though.

What I think has been left out of the discussion so far (apologies if I've missed it from anyone else) is that countries with higher rates of home ownership also seem to have done worse out of the 'great recession' of the last few years. The chart below shows home ownership rates in Europe in 2009 (from Eurostat) against the change in per capita GDP between 2006 and 2011, adjusted for inflation (from the IMF). The size of the bubbles represents current GDP, also from the IMF.

The two countries on the left with lowest rates of home ownership are Switzerland and Germany, and both of them have actually seen positive per capita GDP growth in the last five years. On the far right you've got two very small countries with very high home ownership rates and very differing fortunes of late, Slovakia having posted pretty strong economic growth of 8% over the period and Estonia having lost about 9% of GDP. Of the bigger countries with home ownership rates over 70% only Norway and Belgium have grown over the period, while Italy, Spain, Portugal, Finland and the UK have all seen economic contractions. And then there's Greece down there at the bottom. Obviously this leaves out anything that has happened in 2012 so far or is about to happen, and it certainly looks at the moment as though the likes of Spain, Italy and Portugal are looking at more recession to come - possibly very deep and long ones if things go really awry.

So what should we make of this pattern? Is it just coincidence, or just the result of some other factor? It could, for example, just be that poorer countries have more home ownership (as above) and poorer countries did worse in the recession for some other reason. We would need some careful analysis to identify the real causal paths, but as far as I can see there has been zero academic work done on this so far. That's surprising, but it does at least leave a nice big gap for speculation to fill!

The key features of the great recession in most countries were/are bursting property bubbles and credit crunches. What a high rate of home ownership does is expose more households to asset price increases in the bubble phase (possibly increasing the risk of 'irrational exuberance') AND to big drops in wealth from falling house prices in the bust phase, which then lowers household spending as they try to restore their balance sheets. Meanwhile, the drop in bank lending freezes the owner occupied housing market, making it harder to move house unless the rental market can quickly expand. So you've got a combination of job losses (from the wider recession), lower consumer spending even where people haven't lost jobs, and barriers to mobility making it harder for markets to adjust.

Another way of putting it is that high rates of owner occupation make the wider economy vulnerable to falls in housing demand, because falling house prices make owners want to spend less. But in a country where most people rent, lower housing demand (e.g. through job losses) result in falling rents, which frees up money for higher spending in other areas, helping to stabilise the economy.

There may well be benefits to home ownership (e.g. owner occupiers may take better care of their homes and it may provide a more stable environment for children), and politicians tend to like it, but I think the experience of the last few years suggests there are potentially quite large downsides too.

Despite what I said before, maybe cycling casualty rates aren't strictly comparable between Britain and the Netherlands. How about fatality rates then?

Back in April I posted an analysis of fatal and serious casualty rates for cyclists in Britain and the Netherlands, which reached the eye-catching conclusion that "just over 500 British cyclists are killed or seriously injured in collisions with motor vehicles for every billion km cycled, over eight times the rate in the Netherlands". I used data from the British Department for Transport and the Dutch road safety institute SWOV, but as a couple of commenters pointed out these do not in fact seem to use completely consistent definitions of what constitutes a 'serious' injury, so the comparison might be misleading. For example, snigbo said,

On comparing serious injuries: as discussed in DfT rrcgb2010-6.pdf, GB "serious" includes all admissions to hospitals, many of whom will have a MAIS score of 1. Table 11 suggests that 28% of hospital-admitted cyclists were MAIS 1, so reducing the GB number by that amount would be appropriate.

There is also the problem that for both countries the casualty figures are based on what is reported to police, and there may be differential rates of under-reporting, particularly for incidents not involving motor vehicles.

These are valid concerns, so I've updated that post with a health warning over the data. I'm grateful to the commenters for pointing these issues out, and I apologise if anyone was misled.

Can we then make any useful comparisons between the two countries? Well, it may be tempting fate to go back to the same data sources, but as was also pointed out the data on fatality rates should in principle be more comparable. After all, a fatality is a fatality wherever you are, and you would also expect minimal problems of under-reporting.

The problem here is that the SWOV data on contributory factors in cycling fatalities includes a large number (a majority, in fact) of cases described as 'Not matched', i.e. they don't say whether a motor vehicle was involved or not [Update: Note, this doesn't affect the total fatality rate, which is known - it's just that not every case is allocated to a particular type of incident]. You can just exclude all these unmatched cases and look only at the breakdown of the remainder, which is what I have done in the chart below. Having been burned before I would be cautious about putting too much weight on the results, mainly because of the large number of 'not matched' cases in the Netherlands data, but they do at least seem to be telling a similar story to the previous data, i.e. that the relative risk posed by motor vehicles to cyclists is higher in Britain than in the Netherlands. 

What we've got to learn from the Netherlands

Update: As commenters below have pointed out, the data may not be comparable enough between the two countries to draw such a strong conclusion, for reasons of definitions and possible different rates of under-reporting. See new post on the topic here.

I used data from the Dutch road safety research institute SWOV yesterday to compare cycle fatality rates in the Netherlands with those in Britain, and Mark pointed out on Twitter that SWOV data also breaks down the number of casualties according to whether or not any motor vehicles were involved. This is handy, as it allows us to see whether the low cycle casualty rate in the Netherlands is due to (a) fewer collisions with motor vehicles or (b) fewer casualties from collisions with pedestrians, other bikes or cyclists just crashing into stuff or (c) all of the above.

This table indicates that 64% of serious or fatal cycle casualties in the Netherlands are the result of collisions with motor vehicles*. This compares with 91% in Britain, from this DfT table**.

We saw yesterday that the cycle fatality rate per km is more than twice as high in Britain as in the Netherlands. According to SWOV data the gap is even larger when you include serious injuries: in Britain there are 556 cyclists killed or seriously injured for every billion kilometres cycled, compared to 96 in the Netherlands (in both cases I'm using the most recent year available, 2009 for the Netherlands and 2010 for Britain).

Put these figures together and you get the chart below, which shows that the rate of serious or fatal cycling casualties not involving motor vehicles is actually reasonably similar in the two countries, 35 per billion km in the Netherlands compared to 49 in Britain. But the gap for collisions with motor vehicles is huge: just over 500 British cyclists are killed or seriously injured in collisions with motor vehicles for every billion km cycled, over eight times the rate in the Netherlands.

I think this shows just about as starkly as possible the consequences of two different approaches to cycling: one which expects cyclists to constantly mix with heavy and/or fast-moving traffic, and one which doesn't. In the Netherlands they very carefully and deliberately try to reduce the chances of a serious collision between motor vehicles and cyclists, and you know what, it looks like it works. In Britain we don't try very hard to do that, and we get the results you see above.

* Select 'Bicycle' under 'Mode of transport' and then nest the 'Type of accident (E-code)' variable in the rows. There are a lot of blanks ('Not matched') under 'Type of accident' for fatalities, so I just calculated the percentage based on the non-blank records)

** Scroll over to 'All areas' and tot up the pedal cyclists killed or seriously injured in collisions with other cycles, pedestrians, or in single vehicle, no pedestrian accidents. The remainder are the results of collisions with motor vehicles.

No, cycling is not safer in Britain than in the Netherlands

Giving evidence before the Transport Committee today, Ministers Mike Penning and Norman Baker declared that Britain has nothing to learn about cycling safety from the Netherlands because our rate of cycling fatalities per head of population is lower. 

Given that both ministers immediately went on to note that many more people cycle in the Netherlands than in Britain (Mark has the quotes), it is difficult to know what to make of this*. It should be blazingly obvious that if hardly anyone cycles in Country A it is likely to have a lower rate of cyclist fatalities per head of population than Country B where nearly everyone cycles. Any Minister who claims this as evidence that cycling is safer in Britain is misleading either  parliament or themselves. Penning and Baker seem quite proud of their factoid, which implies the latter. That is worrying, and not just for cycling policy.

As many people on Twitter immediately pointed out, a reasonable measure of cycling safety would be to calculate deaths or serious injuries per mile or kilometre cycled. And in fact that's what the statisticians at the Department for Transport do. Their table RAS53001 shows trends in fatality and casualty rates per kilometre for various modes of transport. The fatality rate for cyclists in 2010 was 22 per billion kilometres, down by a third from 33 in 2001 but still some seventeen times higher than the fatality rate for those in cars. 

So how does this compare to the Netherlands? We are fortunate that the Dutch road safety institute SWOV publishes comprehensive statistics on road safety trends in that country here - and in English too. These figures include fatality rates for the various modes of transport, equivalent to the DfT statistics mentioned above (note, SWOV calls passenger casualties 'Victims per seat'). 

In 2009, the latest year available, the fatality rate for cyclists in the Netherlands was 9 per billion kilometres, less than half that in Britain (21 in 2009). So cycling in the Netherlands, using a sensible measure, is more than twice as safe as in Britain. The evidence of the Ministers to the Transport Committee was wrong (as if that wasn't already obvious).

The SWOV data throws up some other interesting comparisons. The fatality rate for car drivers or passengers in actually lower in Britain than in the Netherlands (in 2009, 1.6 per billion km compared to 2.1). This means that in Britain, fatality rates for those in cars are 13 times higher than for those on bikes, compared to 4.4 times in the Netherlands. The chart below compares fatality rates for cars and bikes in the two countries - again, all based on official statistics.

In summary, we have nothing to teach the Netherlands on cycling safety, and I trust the Transport Committee (and the Times, who will be reporting on the hearing) won't fall for such obvious nonsense from the two Ministers.

* It reminded me of the line in Ulysses to the effect that Ireland had the honour of being the only country to have never persecuted Jews "because she never let them in". 

How Energy Performance Certificate data could be really useful, but isn't

One of the frustrating things about discussing housing in this country is that we have historically lacked some key data which would allow us to compare ourselves more accurately with other countries. For example, there are no good statistics on the size of homes we're building now. It is commonly accepted that we build very small homes compared to other new countries, but the only some of the evidence for this is very out of date (see this Policy Exchange report from 2005 which cites these EU statistics from 2002 which cite English House Condition Survey data from 1996). It may well be true that we are building small homes at the moment but we just don't have good enough data to say for sure. [Update: I completely forgot about RIBA's excellent research on this very topic. Thanks to Rebecca for reminding me. So the data gap isn't quite as large I thought, though much of the below still applies.]

Relatedly, we can't really compare our house prices with those in other countries because the simplest consistent comparison, price per square foot or square metre, is not available to us. This matters to people who make housing policy, but it also matters to people thinking of moving house between different countries.

There is a solution in sight, however. The law requires an Energy Performance Certificate to be produced for every house that is sold or rented out. An EPC is drawn up by an expert after looking over the house, and captures key information about the energy efficiency of the house. But it also captures other information, notably the type of house, its size in square metres, and its exact address. There are now about 7 million domestic EPCs, all held on a single register and as of today searchable by address. I just looked up the EPC for a house down the road from me, which is the same kind of Victorian mid-terrace as I share with friends. It pretty much confirms what I thought, which is that our house retains heat about as well as a sieve.

To get back to my point though, what this means is that we've got a huge and growing database of home sizes. And because the Land Registry has recently started releasing its data on house prices, again with the exact address provided, it should be possible to link the two datasets together to calculate the average price per square metre in different parts of the country, for new as well as old houses. More sophisticated analysis could also reveal the extent people are willing to pay for for more energy efficient homes.

I don't know whether anyone in government is working on this. As far as I can see they're not, and that wouldn't surprise me as the key department (Communities and Local Government) is these days shedding statisticians and generally doing less analytical work.

But it should be possible for academics and laypeople to analyse the data in this way. The problem is that the government has decided that EPC data should only be available in bulk to certain organisations and only if they are prepared to stump up the money for it. The costs range from 1p to 10p per record depending on how much detail you want, but in any case this quickly mounts up if you want any kind of comprehensive database at local or regional level.

The government says these prices are to cover the costs of disseminating the data. Maybe that's fair enough and maybe it isn't, but it does mean that the kind of useful analysis I've described above can't be performed by anyone outside central government. So if the CLG are determined to ration access to the EPC data by price I think it should really be doing its own analysis and making the most of this data on our behalf.

10% of Inner London gets to work by bike

A while back I posted an analysis of Census data showing the trend in the proportion of people who cycle to work in Inner and Outer London from 1971 to 2001. We won't have equivalent figures from the 2011 Census for several months, but we can use another source of information on travel to work, the Labour Force Survey (which I mentioned yesterday when talking about trends in car travel).

The chart below shows the proportion of LFS respondents in Inner and Outer London who reported using bicycles as their main mode of transport to work between 2004 and 2011. One important thing to note is that in each year the data is from the October to December quarter of the survey only, so differences in autumn weather from year to year will affect the results somewhat. Also, as with the car data yesterday these figures are estimates based on relatively small samples of people, and so they have largish confidence intervals around them. This means that there are few if any statistically significant year-to-year changes - but for both Inner and Outer London the trend over the whole period is fairly clear.

In late 2004 around 6% of Inner London workers commuted by bike, rising to around 10% in late 2011. For reference, the share who travelled to work by car fell from 20% to 16% over the same period. A few more years of this and they'll be level pegging.

As we have seen before, cycling is much less common in Outer London, but at least it now seems to be rising, from a 2% share in 2004 to 3.5% in 2011. Not shown is the trend in the rest of the UK, but it's basically flat at around 3% throughout.

[Note: The LFS data here was downloaded from the Economic and Social Data Service]

People are using their cars less (but still quite a lot)

There has been much talk here and in other countries about the apparent declines in personal car travel seen in the last few years. Generally these are relatively small declines compared to the huge increases in car travel seen in previous decades, but if per capita car travel has peaked and is falling then that would at least be noteworthy from a social point of view, and possibly quite important for transport policy - see for example this letter from the head of the Transport Planning Society arguing that the Department for Transport's London traffic forecasts are out of whack.

The chart below shows my calculation of daily car travel in miles per person in Britain from 1949 to 2010, derived from these DfT statistics on car travel and population data from the Census and from ONS mid-year estimates.

According to these figures, per capita daily car travel peaked in 2004 at 11.7 miles and has been trending slowly downwards since then. A couple of caveats are probably in order at this point: we are in a recession, which usually reduces travel, and while these figures are per person, strong population growth could in future increase total car travel even if the per capita average continues falling. Finally, the reduction in car traffic is slightly offset by a rise in light van traffic over the same period.

We've also got data for London, though only going back to 1993. The chart below uses population data from ONS but published on the London datastore. The trend here is quite different, already flatlining in 1993 and falling fairly consistently from the turn of the millennium. While car travel per capita has fallen across London, the drop is particularly large in Inner London, down 28% over the period. The average Inner London now travels a shade under four miles a day by car, compared to just over six for Outer Londoners and eleven for the average Briton.

Lastly, much of the talk in the US is about whether car travel is particularly falling among younger people. To try and get a feel for this I looked at data from the Labour Force Survey on the main mode of transport people use for getting to work. Obviously the caveat here is that commuting is only a subset of all travel, but it's the best we can do for now. The chart below shows the proportion of people in broad age groups who reported travelling to work by car in 2004 (the earliest year I could find) and in 2011.

It's really important to emphasise here that this is based on a sample survey, so the estimates have confidence intervals around them (the little black lines). This means that in most cases the change is not statistically significant - including the apparent increase in car use among 16-19 year olds. The only age bands in which there was a clear, statistically significant change over the period were 25-29, 30-34, 35-39 and 50-54 year olds, all of whom were less likely to drive to work in 2011 than in 2004. So there's evidence of a fall in car commuting, but mainly by the 'young-ish' rather than the young (only around half of whom commute by car anyway).

What women want (when it comes to cycling facilities)

About 70% of cycle trips in Britain are made by men. But in countries where lots more people cycle, like Germany or the Netherlands, the gender split is roughly equal.  You can see the same relationship when comparing areas within countries, so it seems like a fairly robust link. Where cycling is a marginal activity it is mostly dominated by men, but where it is a normal part of everyday life women cycle just as much.

As this article in Scientific American from 2009 says, women are therefore a sort of "indicator species" for bike-friendly cities. But why? Well,

First, studies across disciplines as disparate as criminology and child ­rearing have shown that women are more averse to risk than men. In the cycling arena, that risk aversion translates into increased demand for safe bike infrastructure as a prerequisite for riding. Women also do most of the child care and household shopping, which means these bike routes need to be organized around practical urban destinations to make a difference.

So on average women seem to put a premium on safer cycle routes (that go somewhere useful). And the available evidence says this translates into a clear preference for facilities with a higher degree of separation from general traffic. When Jan Garrard and others carried out a survey of cycle use across a range of locations and infrastructure types in Melbourne, they found that "Consistent with gender differences in risk aversion, female commuter cyclists preferred to use routes with maximum separation from motorized traffic".

Similarly, when John Pucher and others looked at who uses which facilities in New York, they concluded:

Women in all five boroughs clearly prefer off-street paths ... the average percentage of women cyclists on paths is about three times greater than the percentage of women using on-street facilities such as bike lanes or simply bike routes on shared traffic lanes ... In short, the greater the physical separation from motor vehicle traffic, the higher the women’s share of cyclists.  

So the evidence seems fairly clear, and on that basis I think it would be good to see people arguing for more high-quality, separate cycling routes as a contribution towards greater gender equality.

But at the same time one probably shouldn't overstate the gender divide here. After all, it's not as if the proportion of men who cycle regularly in the UK is particularly high: it's probably fairer to say that current cycling facilities suit a tiny minority of men and an even smaller minority of women. Basically, it is risk-averse people (i.e. most people) who are discriminated against by our current cycling infrastructure, and if we had much safer cycling conditions we would see far more men cycling too. So while cycling infrastructure is a feminist issue in that the current setup particularly discriminates against women, it's also one of the many issues where feminist solutions would also benefit men in general.