One of the most basic tenets of standard economics is that consumer choice dictates the market. Yet in discussions about transit, many economic analyses seem to throw consumer preference out the window, insisting that riders’ preference for rail over bus doesn’t matter, or is imaginary.
Opponents of rail projects often argue that trains are a waste of money because buses provide the same benefits for less cost. That’s incorrect on technical grounds, but it also ignores the factor of consumer preference.
The great virtue of markets, mainstream economics asserts, is that they compel producers to make what the “sovereign consumer” desires. Each individual buys what he or she wants and isn’t forced to accept what someone else thinks they should want.
But as I recently discussed in more detail in Dissent magazine, transportation economists often ignore a basic premise of their own discipline, and dethrone the sovereign consumer.
Be complete and be honest
Unlike their colleagues who study ordinary markets, transportation economists don’t try (as they could) to measure consumer preference and weigh the costs of meeting it. Instead, they tell commuters who yearn for trains that their preferences are mere emotion and myth.
Telling consumers they’re wrong to feel the way they do is extremely unusual, and transportation economists’ insistence upon doing so undermines honest economic assessment of transportation proposals. Most commuters have options, and every freedom to put their preferences to practice.
This is not to say there aren’t economic advantages to buses. Of course there are. Buses are generally cheaper, so cities can use buses to run more transit routes to more places than they could on a rail-only system. That’s a genuine benefit. It matters, and it’s why we’ll always have dozens or hundreds of bus routes for every rail route.
So economists are correct to assert that buses can offer great value. But the fact that buses are great on their own terms does not mean consumer preference for rail can be left out of economic analysis.