Friday, 26 March 2010

Hunt the Heuristic: “Public Transport is Slow and Expensive”

“Traditional” economics assumes that we are rational decision makers. Behavioural economics shows us why this is often not true, frequently because of heuristics. The latter are rules of thumb that steer our decisions, even though we are often not aware of them, or they may not be true. How come heuristics are important? And what do they have to do with owning a car? When it comes to decisions about personal mobility, one of the most common heuristics is “Public Transport is Slow and Expensive.” Sometimes, this can be true. Often it isn’t. Speaking at the UK Public Health Association in Bournemouth this week, I did the return trip by train. The walk-on, off-peak fare (using a Network Railcard) was £14 return from Hove to Bournemouth. Google Maps puts the distance at around 95 miles each way, 190 miles for the return trip. Based on HMR&C’s standard rate for a car, 40p a mile, doing the return trip by car costs £76. On top of the train fare, and because it was raining, we’ll add in taxi fares from home to Hove station, and from Bournemouth station to the hotel - another £10. Then £5 from the conference centre back to the station, ditto from Hove to home (still raining!). Which adds up to £34 by public transport versus £76 in a car. Half the price, using public transport! Which seems a bit of a bargain, given that it also includes paying the wages of the people who are doing the thing that I didn’t have to do – driving the train, or steering the cab. And because I wasn’t doing the driving, I was free to do other things. So what about the time saved by car? With no traffic hold-ups en route (a big assumption), the journey time could have been about twenty minutes quicker each way by car. Which doesn’t include the time spent parking, getting a windscreen sticker from the hotel, putting petrol in the tank, etc. So the key question becomes, is it worth a premium of £42 to save around 40 minutes (there and back)? For the pleasure of driving along rain-swept motorways in the dark. Not to mention the risks. Which is why, before making a decision, it’s always a good idea to play “hunt the heuristic.”

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