Saturday, January 13, 2007

We need more roads

Above is a photo of the main freeway entering Tel Aviv.

It is an accepted knowledge among urban economists that for much of the income scale, the income elasticity of car ownership is close to 1. In other words, in western countries a percentage increase in income is expected to generate a similar percentage increase in car ownership.

Israel is experiencing, and is expected to experience, a relative rapid growth in GDP per capita. There are think tank groups in Israel that predict and propose policies that will bring Israel to among the 10 highest income countries in the world within the next 20 years. I am not sure that this will happen. However, income is expected to grow and so will car ownership.

This expected growth raises an important policy issue. Already today, the density of cars on roads is creating massive traffic jams on inter-urban roads and especially during morning in-coming traffic hours and during afternoon exiting traffic hours. The cost in work time lost and in property and life losses due to traffic accidents is enormous. The number of car accident victims in Israel is greater than the losses due to wars.

There is no doubt that improvements in mass transit infrastructure will alleviate the situation, somewhat. And indeed, investment in inter-urban rail and suburban light rail systems is massive and is expected to grow. And so it should.

However, there is a need to invest in roads as well. It is unreasonable to think that people who do not reside within walking distance of fixed rail corridors will be consumers of these systems. As the cost, in terms of time, increases the demand for mass transit is expected to decrease. Therefore, unless we invest in roads the density of cars on roads will continue to grow and the associated cost with it.

Obviously, I am for the use of the price system to regulate the allocation of road space. As of now, the cost of owning and using a car in Israel is exorbitant. The tax on the purchase of a car is upwards of 100 per cent. The cost of gasoline is equally high in comparison to the USA. It is peculiar that Israelis are unwilling to part from their cars.

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