We chat with Dr Peter Swan from Penn State University, in Harrisburg. His recent study (with Michael Belzer of Wayne State University) found that increased privatization of highways may increase the traffic on what are perceived to be free roads (of course, they carry costs–just not directly billed.) According to a Penn State press release:
The number of diverted trucks is important to both the State of Ohio and the nation for economic and social reasons. First, many of the substitute roads are two-lane highways with crash rates many times that of the Turnpike. Second, the increased traffic has reduced the quality of life for communities located along diversion routes and dramatically increased the maintenance costs of many of these roads, say the researchers. Finally, higher truck tolls have two negative effects on the economy. Motor carriers eventually pass all tolls to consumers in the form of higher prices for goods. While higher toll rates may not decrease the efficiency of non-diverted trucks, they have raised costs. Furthermore, diversion reduces the efficiency of these trucks because they clearly are taking a second-best route. The resulting loss of efficiency can stifle economic activity, according to the study. Many of these economic and social costs may not be considered in future leases or sales, especially when such costs are paid by people in states other than the one making the lease agreement.
Give it a listen, and let us know your opinion about this topic. Should roads be privatized? How do you want to bill people for their use of roads?
Download: Pete Swan and Highway Privatization