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In this week’s edition of: “Benefit-Cost Analysis” is just a matter of opinion, here is what Randy O’Toole has found out in California:

The San Francisco Chronicle is aghast that new 140-seat ferry boats between South San Francisco and Oakland/Alameda are filling an average of just 20 of their seats (scroll down to “On the line”). The service, which cost $42 million to start up, wasexpensive enough at projected ridership rates, but actual ridership so far is just a third of those projections. Even before such low ridership was known, the paper opined that the ferry service may not be “prudent.”

The Chronicle estimates that subsidies to the ferry service average $133 per trip, while subsidies to BART average just $6 per trip. That’s a little less than the Antiplanner’s 2010 calculation of $10.68 per trip on BART. But either of these calculations are for BART as a whole. The subsidies for the BART line to San Jose, which is in early construction phases, were estimated to be on the order of $100 per new transit rider. San Francisco’s Central Subway (which is really just a glorified tunnel for light-rail trains) is likely to be as expensive

Are such investments prudent? Once you decide it is okay to lose $6 (or $10) per trip on BART, or $15 for the Sausalito ferry, or $100 per new trip on BART to San Jose, then why draw the line at (or below) $133 for a ferry ride? The Obama administration wants to rewrite the rules to make cost-effectiveness irrelevant in transit funding. If that happens, it won’t be long before we see projects costing $500 or more per trip. After all, most of that will probably be capital costs, and capital costs don’t count.

Corn ethanol that damages our waterways, hogs land use, doesn’t reduce CO2 emissions, and hurts poor families and at taxpayer costs in the billions of dollars per year. High speed rail that costs in the hundreds of billions of dollars range that add emissions and are subject to all kinds of construction cronyism. Ferry subsidies of $100 per ride? THIS is why we worry about bad projects, bad lessons taught on college campuses, and symbolism in general. It is not costless. Not at all.

One Response to “Thank You for Your Opinion”

  1. Harry says:

    Attaboy, WC, theunbrokenwindow web master. I assume we are both skeptical of the effect of CO2, either way . We can agree that government at all levels is good at wasting resources on a grand scale, and that it has nothing to do with expensive military toilet seats.

    But then, we armchair economic wizards make macro comments all the time with certainty.

    Today I bought a tractor , a Ford 8N for what I thought was a fair price, but who knows? It was voluntary on both sides. It cost less than a monthly payment for cheap health insurance.

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