COMPILADOR CCS

Issues

Commuting is a cost of economic growth. As cities become increasingly over populated, roads become clogged with increased numbers of private and public vehicles attempting to move large numbers of people. The end result is increased levels of wasted time spent commuting to and from work. Commuting is a separate problem to urbanisation though,

0 5000 10000 15000 20000 25000 30000 1975 1976 1977 197 8 197 9 198 0 198 1 198 2 1983 1984 1985 198619871988198919901991 1992 1993 1994 1995 1996 199 7 199 8 199 9 Years Bah t

because an efficient mass transport systems could reduce such time delays considerably if they replaced the over reliance on the private vehicle that economic growth encourages. In tandem with urbanisation, the problem of commuting has increased with the growth of cities. This is particularly the case in Thailand where Bangkok is perhaps the world’s greatest primate city (Dixon 1999).

Social Choice Perspective

Previous studies (Sametz 1968; Nordhaus and Tobin 1973; Daly and Cobb 1990) recognised that one of the costs of economic growth was commuting and included it in each of their calculations of social welfare. The ANI index for Thailand will also include commuting as a cost of economic growth.

The individual decision to commute to work in a private vehicle, rather than use public transport, is taken on grounds of convenience, comfort and access. ‘Despite their expense, cars are no longer perceived as a luxury’ (Poungsomlee and Ross 1992, p. 42). In fact, Bangkok is one of the largest markets for Mercedes Benz cars in the world (Watkins 1998). An additional car on the road will not make much difference to the experience of other drivers. However, as an additional 800 are registered every day in Bangkok (Bello 1995), the social consequences of these individual choices can be quite significant for society. This equates to over an extra two kilometres of bumper to bumper traffic being added to the crowded streets of Bangkok every day.

Individual preferences do not consider the impact of all other individuals making similar decisions. A social choice perspective allows the negative impact on social welfare of these aggregated individual choices to be included in the calculations. The decision to drive can be understood within a prisoner’s dilemma framework. If everyone co-operates and chooses public transport over private transport, everyone benefits. However, within this scenario, the individual is assured of receiving greater benefits if they choose to defect rather than co-operate and drive their own vehicle (even if everyone else also

defects) (Clayton and Radcliffe 1996). Under these conditions the welfare implications of social choice theory versus market preferences can be observed.

If the road system had capacity to carry this extra load, then the problem may not be as serious. However, it appears that the current transport system (including the opening of new toll-roads and the Skytrain) is unable to cope with any increases (Dixon 1999) and current road works and additional roads being built are also inadequate in keeping up with the increase in cars (Ross 1993):

Road surfaces are not expanding quickly enough to cope with the great increase in the number of vehicles. The total length of roads – major, minor and access roads – is 2,800 kilometres which provides a traffic surface area of about 38.44 square kilometres. This represents only 2.8 per cent of the total Bangkok area, a proportion which is far too low when compared with the recognised standard used in other cities of about 20 – 25 percent. (Poungsomlee and Ross 1992, p. 19)

As a result, it is always “rush-hour” on Bangkok roads and the average speed is between 5 to 8 kilometres per hour (Dixon 1999). The major casualty of this is time (Poungsomlee and Ross 1992):

Even for short distances people will leave home one or two hours early in order to reduce the time spent in traffic, travel on a less crowded bus, or secure a parking space, even if this means arriving at work or school unnecessarily early. (Dixon 1999, p. 205)

The overwhelming impact of the transportation system is on people’s time, which in turn has impacts on family life and health. People have little time at home to rest, spend with their families and friends, or carry out their household responsibilities or recreational activities. (Ross 1993, p. 13)

The demand for transportation within urban areas of developing countries, such as Bangkok, rise faster than the increase in income as ‘the income elasticity of demand is

usually well in excess of unity, per capita incomes are rising more rapidly than in the advanced economies, and urbanisation rates are rising more swiftly (Jolley 2002, p. 2). Methodology

The cost of Bangkok’s jammed roads has been estimated to be 60% of the capital’s regional product by the Japan International Co-operation Agency (McGee and Greenberg 1992 – cited in Parnwell and Arghiros 1996). In 1991, the World Bank calculated the cost of commuting on people’s time to be 1.4% of GDP (Dixon 1999). Another study, on which the ANI will be based, was undertaken by Tanaborrboon (1990) which estimated the cost of commuting in Bangkok to be about US $400 million per year in 1988.

This figure can serve as a basis for extrapolation forwards and backwards based on the number of cars on city roads. Two other considerations, which could affect the legitimacy of these extrapolations, can be assumed to counteract each other. The accumulation effect of increasing cars which could see an increasing effect on congestion once a certain level of congestion has been achieved can be assumed to be offset by the increase in road surface increases – inadequate as it is (Dixon 1999).

The cost of commuting per registered car in 1988 in Bangkok was US $219 based on Tanaboorboon’s (1990) calculation. This figure can then be multiplied by the number of registered cars each year to calculate the cost of commuting. For example it was US $400 million in 1990, US $613 million in 1994 and US $79.5 million in 1975. As a percentage of national income (which is the basis of the ANI) this figure intuitively appears correct. It increased from 2.4% of national income in 1980 to 5.8% in 1994. This is the range of other estimates (McGee and Greenberg 1992- cited in Parnwell and Arghiros 1996; Dixon 1991; Martin and Schuumann 1997; Khomnamol 1999). It also appears to correlate with an increasing number of cars each year in Bangkok having an increasingly larger negative impact on people’s welfare.

The costs of commuting is only calculated for municipal populations in Bangkok as Thailand’s urbanisation problems are concentrated primarily in Bangkok (Dixon 1999).

Other “cities” in Thailand have relatively low levels of urbanisation and are thus excluded from these calculations as it is expected that such costs would be quite minor and have a limited impact on the ANI.

CC = NRC(219.XR) [4.8]

where CC = cost of commuting

NRC = number of registered cars in Bangkok

XR = exchange rate

See Appendix C for calculation.

Figure 4.5 Cost of Commuting in Thailand, 1975-1999 (1988 prices – millions of baht)

Source: Author’s own calculation

-25000 -20000 -15000 -10000 -5000 0 1975 1976 1977 1978 197 9 1980 198 1 198 2 1983 1984 198 5 1986 1987 1988 198 9 1990 1991 199 2 1993 1994 199 5 1996 1997 1998 199 9 Y ear Ba h t C os t of C om m u ting

Results

As with the previous benefits of public expenditure on health and education, the adjustment for the effect of commuting on social welfare in Thailand is not significant in itself. What is significant though is that unlike the previous two adjustments, the adjustment for commuting actually reduces the measure of social welfare. Commuting is a cost of economic growth and subsequently when its affect is considered, social welfare falls. The decision of individuals to commute has negative impacts on social welfare that are not captured by individual preferences.

The cost of commuting is quite static between 1975 to 1981. The cost then increases steadily for the next fifteen years before an accelerated growth in the cost in 1997 and 1998. This negative adjustment signifies that economic growth causes certain social welfare disamenities that need to be considered when measuring social welfare. Such disamenities are usually counted as positive additions in standard national accounts, raising GDP, which incorrectly reflects increases in social welfare.