Green Nudge on Italian trains

When you buy a rail ticket in Italy, you sometimes get one that looks like this:



And when you flip it over, the back shows a comparison of the carbon footprint of a journey by train, by car and by plane, like this:



It would be even better if it could show you the carbon footprint of the actual journey you’re taking by train, compared with a car or plane. What’s the Italian for algorithm?

How To Live Longer – Ditch the Car, Go By Train

The news that citizens of the UK come 12th on a list of 19 countries for life expectancy at birth means that Brits can expect to have shorter lives than people in many other countries – like Spain, Italy and Australia. A lot of commentary has blamed the NHS, but, as Prof John Newton, chief knowledge officer of Public Health England, which assumes its responsibilities on 1 April said, "I'd be very surprised if it was the healthcare factors that are making the difference….It is more to do with a culture of supportive communities, people's lifestyles and their diets."

The Guardian has published a list of ten ways to live longer – and Number 9 is Take The Train. As the Guardian notes, “Road injuries were the 12^th highest cause of years of life lost in the UK in 2010, but if you take just adults aged 20 to 54, they were fifth – after heart disease, self-harm, cirrhosis and breast cancer, and just above drug use. According to the independent Oxford healthcare journal Bandolier, which used 2006-7 data from sources including the World Health Organisation and the Department for Transport, the lifetime risk of dying before the age of 75 are one in 976 in a car, one in 54,433 on a plane and one in 131,313 in a train.”
This will not be news to students of behavioural economics, who know that we humans are incredibly bad at risk assessment, particularly when it comes to everyday activities – which, for many people, includes getting in the car. Another great reason not to…

Trains Can Be Cheap: Apply Some Behavioural Economics And Put Your Heuristics On Hold

The previous post showed how you could travel 588 miles on British trains for around £37 a head, compared to the 45p a mile cost of using your own car – which comes to £264.60 for the same mileage. People normally say that a train might be cheaper for one or two people, but not for multiple travellers. For this journey, you’d have needed seven people for the car to be cheaper. You might argue (wrongly) that the relevant costs are just the fuel for the journey: assuming around 35 mpg, that would be about 16.8 gallons, or 76 litres: £99 at £1.30 a litre. So even paying just for fuel, you’d need more than three people travelling to make going by car cheaper, not to mention the hassle of driving for over 5 hours. So how come mainstream thinking is that trains are expensive and unaffordable, while the truth is a lot messier: sometimes they are, and sometimes they aren’t? Behavioural economics can shed some light.
When rail fares go up - like the recent announcement - there’s normally massive media coverage. So the idea “trains are expensive” becomes highly salient and very vivid. Here’s another example, from the Daily Telegraph, which points out that planes are cheaper than trains on half of the surveyed routes in the UK - that’s pretty vivid. (although also in the article, much less prominent, is the following quote, “Despite soaring fuel prices, travelling by car proved cheaper than taking the train on 16 of the 50 journeys.” Which is a great example of another behavioural economics technique, notably framing - because what the data actually says is that train is cheaper than car for 34 out of 50 journeys. Or put it another way, train is cheaper than car on 68% of the journeys in the survey).
So, thinking about our own journeys, what we mostly don’t do is analyse the comparative costs of using different modes for a particular trip. Instead, those vivid and salient examples of expensive train travel pop up because they are readily available to our memory, hence the “availability heuristic:” a rule of thumb we use when faced with a decision.
As Daniel Kahneman, the godfather of behavioural economics, shows in his book Thinking, Fast and Slow, when we are asked a difficult question we mostly don’t analyse the data using the rational part of the brain. Instead, we often allow our instinctive "gut reaction" to answer a related, simpler question. In this case we might just skip the difficult stuff and ask ourself “why don’t I just use the car?” Understandable when the alternative is going through the complicated and energy-sapping analysis of rail fare options (MoneySavingExpert can help out here). Far easier to let our availability heuristic do the mental shortcut and conclude that train travel is expensive, so we’ll go by car. Even more likely if high-profile media coverage triggers an "availability cascade", a self-sustaining chain of events which leads to the overestimation of probabilities – which in this case would be “going by train is more expensive.”
So here’s

a behavioural economics guide to cheaper travel:

First, put your heuristics on hold – especially your availability heuristic;
Second, make sure you ask the right question (eg: what is the cheapest and most convenient way to accomplish this journey?);
Third, ensure that you answer the same question, rather substitute an easier one that springs to mind.
You might be surprised by the answer…..

To Hull And Back: Cheaper…And Quicker By Train

With all of the (justified) outrage over yet another upcoming increase in rail fares, it can be easy to overlook the bargains that are available if you travel off-peak and can commit to booking in advance. We recently walked the Yorkshire Wolds Way, the beautiful 79 mile National Trail that goes right through the heart of what has now become Hockney country. And then we added on a wonderful stretch of the Cleveland Way along the seacliffs from Filey (where the Yorkshire Wolds Way ends) to Scarborough. We did all this easily, quickly and cheaply, without using a car. How come?

We got to the start of the walk by taking the train(s) from Hove to Hull. To a hotel in Hull, the Mercure,  actually on the station. Booking in advance, and with a 30% railcard discount, the tickets cost £2.65 from Hove to Victoria, and £6.65 from Kings Cross to Hull. Making a total of £9.30. Add a couple of quid on the Oyster card for the tube from Victoria to Kings Cross. Which comes to say £12 each, for a trip of 275 miles. Coming back from Scarborough to Hove cost a bit more, even on an advance ticket – £24.55 each, including the tube. But then, it is 313 miles, and it does include a blindingly fast train from York to Kings Cross – 188½ miles, non-stop in 1 hour 55 minutes, averaging nearly 100mph. Outbound and return, a total of 588 miles by train, at a cost of around £37 a head - compared to the HMRC rate of 45p a mile for owning and running a car, which comes out at £264.60.

But surely you pay the price for cheap fares by going slow? Not so. Coming back from Scarborough to our front door in Hove took a shade over 5 hours, including crossing London by tube, doing a quick shop at M&S on Victoria station, and taking a bus home from Brighton station. Google maps gives a timing by car from Scarborough to Hove of nearly 5 and a 1/2 hours, so train+tube+shopping+train+bus is quicker.

So not only do you save money and time going by train, you get to read your book or newspaper, watch a video, eat a sandwich, enjoy a drink, have a conversation, gaze out of the window, or go to sleep. You also don’t have to consider the best route from A to B, where your sat nav is going to take you, or what other drivers are up to. But even better than not having to drive it is that, when the train arrives you just walk away and leave it. No need to think about getting it serviced, taxed, insured, or refuelled. And best of all? Someone else takes care of the parking.

It’s Cheaper By Train: Economics and Behavioural Economics Postscript

What might conventional economics and behavioural economics say about the previous post? Conventional economics would presumably start off by saying that the reason why more people don’t come to similar conclusions - and take the train - is down to information failure. That is, for a market (let’s call it the market for personal transport from A to B) to operate effectively, all market players (including you and me) need to have access to all of the information out there. Which means knowing a) that you can get from Hove to Cromer by train and b) that cheap train fares are available.
The other information necessary for making a rational decision is the full costs of doing the journey by car. Of course, if you already own a car, many of the costs are fixed, and don’t change according to how much you use it – capital cost, depreciation, insurance, tax etc. Again, a car owner might say that since these costs are already incurred, it makes sense to use the car. In fact, a truly rational economic approach would be that these are “sunk” costs - if the money has been spent, and cannot be recouped, it should not play a part in the decision about a future journey. Instead, each journey should be evaluated on the basis of the marginal cost of that journey. Which means comparing the price of the fuel with the cost of the rail ticket. In the case of Hove to Cromer return, it’s still cheaper by train if there’s one person travelling, on par for two travellers, and only becomes cheaper by road if there are more than two people in the party.
What we think about the price of going by train is influenced by the “story” we tell  about train ticket prices. These “stories,” which just don’t play a role in conventional economics, are important in behavioural economics. The story is that train travel is expensive and complicated, as this article from the BBC illustrates. The reality is that sometimes fares are expensive, sometimes they aren’t. It mainly depends on how captive the customers are. Passenger yield management, familiar from airlines, is becoming commonplace on the rails. So price elasticity of demand is important – train companies will charge more if the customer can’t switch to another provider.
On top of all that, paying out the money for a train ticket is what behavioural economists call salient, or what you and I call painful: unlike many of the costs of owning and running a car, some of which, like depreciation, are practically unseen. At least until you come to sell the car. But the costs of fuel and the price of parking, are extremely salient, hence subject to intense focus by car owners.
So when it comes to making decisions, conventional economics says you need as much information as possible, while behavioural economics says that you can have too much information. So when it comes to making a decision, a key question is always going to be: how much information is enough? And just asking that question might be a good place to start…

And Is There Honey Still for Tea?

There are times when travelling on public transport in the UK can be a surreal experience, akin to slipping into a different part of the space-time continuum.  Or so it seemed at 18.15 on Thursday 30 December, when I took this photo of the clock on Platform 1 at Swansea railway station.  Just as bizarre were the platform departure screens, also shown. If knowledge is power, what on earth is Arriva Trains Wales trying to tell us?