The unfairness of free roads
Do free roads help the poor? Poor people have little money, so holding down prices can help them. But poverty is fundamentally a problem of low incomes, not high prices. The ideal anti-poverty program would therefore transfer money to low-income people and let them spend it as they see fit, not selectively lower the price of some goods and hope that poor people want them. Ideal programs aren’t always feasible, of course, and efforts to give poor people money often encounter political resistance. Sometimes keeping prices low is the best we can do. But if lowering prices is the path we take, we should either lower prices only for the poor (as we do with food stamps) or — if we lower them for everyone — do so only for goods the poor use disproportionately (as we do with transit fares). Free roads, especially at peak hours, satisfy neither of these criteria.
To see why, think of everything you must do before using a free road. You need to buy a car, fuel it, inspect it and insure it — already you’ve spent thousands of dollars. If that’s beyond your means, free roads give you little benefit. If you can afford this investment, the free road helps you, but only in proportion to your ability to keep spending, since every time you use the road you are also burning gas, putting additional wear on your vehicle, and hastening the day it needs to be repaired or replaced.
In public finance terms, free roads look less like a progressive transfer (the government moving resources from rich to the poor) and more like a matching grant (the government moving resources to people who can first produce resources themselves). Matching grants have their uses, but for obvious reasons they are terrible ways to assist the disadvantaged. Free roads “help” the poor, but only after the poor have made large investments, both upfront and ongoing, in the depreciating assets that are cars.
The argument here is not that poor people don’t drive. The United States is built around automobiles, and even low-income people make most trips by car. But the poor drive much less than the affluent. They are particularly less likely to drive in peak directions at peak times, when tolls would be highest. This is so in part because the poor are less likely to be employed, and in part because when they are employed they are more likely to work at off-peak hours (for example, as janitors or waitstaff or retail clerks), and not commute in peak directions (e.g., driving from the city to suburban malls).
Figure 1 shows data from the 2011 U.S. Census (the left pair of bars) and the 2009 National Household Travel Survey (the right). Both tell the same story: in the morning peak, the poor are under-represented on the roads, while the rich are over-represented. The Census data show that in the United States’ 10 most congested urban areas, poor households are 14 percent of the population, but only 4 percent of peak-hour drive commuters. Households earning more than $150,000 per year, meanwhile, account for 15 percent of the population but 28 percent of peak-hour drive commuters. Most drive trips aren’t commutes, of course, and many commutes don’t occur on crowded roads, but the NHTS data show that even if we account for these factors — by examining all morning peak driving on urban freeways areas — the story doesn’t really change. The poor account for 19 percent of the urban population but only 11 percent of peak freeway driving trips, while households earning more than $150,000 a year are 21 percent of the population but make 31 percent of peak freeway driving trips.
Figure 1. Poverty and affluence in the morning peak period travel
These data suggest that free roads are indeed a subsidy, but not one for the poor. Free roads are instead a subsidy to the affluent that some poor people — those prosperous enough to have reliable cars — can enjoy. Keeping roads free delivers no benefit to many people in need (those too poor to drive), and many benefits to people whose needs have been more than met.
Do free roads harm the poor? They can. When roads are free they get congested. Congestion’s most visible costs — lost time, wasted fuel, and crashes — fall largely on drivers, which means they fall largely on the affluent. But congestion also creates vehicle emissions, which are most harmful within a short distance of congested roads. Since low-income people are more likely to live near freeways and other congested facilities, they bear a disproportionate burden of the pollution’s costs.
Figure 2 examines the 10 most congested urban areas in the United States, and compares the population living within 1,000 feet of a freeway to the population that does not. Twenty percent of the freeway-adjacent population is poor, compared to 13 percent of people who aren’t freeway-adjacent. These averages, moreover, conceal much larger disparities in individual regions. In New York, the poverty rate in freeway-adjacent places is almost double that in places without freeways, and in Atlanta, Boston, and Seattle it is at least twice as large. In total, the freeway-adjacent parts of these regions are only 0.3 percent of the land area, but hold over 2 percent of the population in poverty. Households close to the freeways, furthermore, are more than twice as likely to lack automobiles as households farther away. Thus people who live near unpriced freeways tend to enjoy fewer of the freeways’ benefits (because they own fewer cars and drive less) while suffering more of the freeways’ costs (because they must breathe the emissions of those who drive more).
Figure 2. Poverty status and vehicle ownership by freeway adjacency in the United States’ ten most congested urban areas
These costs aren’t trivial. Vehicular air toxics are the largest cause of air-pollution-related cancer in the United States, and car-based pollutants also cause respiratory disease, cardiac disease, and preterm birth — which in most years is the leading cause of infant mortality in the country. Fortunately, most preterm babies survive, but the condition has been linked to lifelong disadvantage. Exposure to traffic congestion at an early age is thus both a consequence and cause of poverty, an example of the intergenerational transmission of disadvantage that economist Janet Currie calls “inequality at birth.”
The fairness of priced roads
Priced roads pose an equity problem because they are regressive: their burden rises as income falls. A toll designed to maximize a road’s performance (for example, maintain speeds of 55 mph) is levied without consideration of driver income. London’s congestion charge, for example, is $15 per vehicle, regardless of who is in the vehicle. On efficiency grounds, this makes sense: cars don’t consume less space, and cause less congestion, simply because the people driving them have less money. On equity grounds, however, it can be troubling; $15 is a bigger obstacle for a poor person than a rich one.
Does this regressivity make pricing unfair? From one perspective, no. Congestion prices are fair the same way water meters or carbon taxes are fair: If you’re going to use a resource, you should pay for it, not push some of the costs — in time, pollution, or crash risks — onto others. Pricing is not fair, however, according to the “ability to pay” principle, which holds that those who have more should pay more. It is the ability-to-pay perspective that yields the “Lexus Lane” critique: fast travel for the lawyers, lost trips for the landscapers.
Again, though, how are free roads different? On free roads, those who have more don’t pay more — everyone pays nothing. And while congestion charging might stop some people from driving, by making it too expensive in money, congestion also stops some people from driving, by making it too expensive in time. Tolls can deprive a landscaper of precious earnings, but so can traffic jams, if they prevent him from reaching an additional job before day’s end. Is it worse to have paid roads where prices prevent some trips, or free roads where shortages do the same? To paraphrase the writer Frances Spufford: what’s the difference between being able to afford something that isn’t available, and not being able to afford something that is?