A new study purports to demonstrate that in many cases, wealthy individuals are incentivized to use public transit:
An interesting snippet:
Alternatively, if Wrich * F < C then some rich people will take public transportation. In this case, a four ring city can be one outcome. In the inner ring, the rich take public transportation. In the next ring, the poor take public transportation. In the third ring, the rich drive and there may be a fourth ring where the poor drive.
Wrich here is a rich person’s opportunity cost of time, F is public transportation’s fixed time cost, and C is driving’s fixed time cost, for those of you who enjoy formulae. In all, not a bad description of some familiar metropolitan areas, is it?
Interesting that you can get a theory of urban econo-geography from Wrich * F < C. And it’s seductive, maybe even informative. But …
Wrich = Wrich, and that’s the same regardless of the mode of transit … unless you’re saying that you need to assign some additional intrinsic value to using a car, or to the value of wealthy persons’ time in a car, or both.
Anyway, my point is that the equation should actually be Wrich * F < Wrich * C, and the Wrich cancels itself out. The only real points made are:
1) That commuting costs are different for people in different income brackets, depending mainly on their opportunity cost of time, and
2) That the fixed monetary cost of a vehicle is inconsequential to the decision making of the rich … it’s all about commute time.
So, this is basically a formal statement of what Bruno and I have been talking about on the podcast recently: that urban cores will continue to increase in popularity and property value, largely because they minimize the risks associated with commuting costs – living in the urban center is a Pareto optimal answer relative to a person’s housing possibilities.
[Thanks to Bruno for sending me the link.]