Lewes Road transport scheme wins another award for Brighton and Hove. But what about Valley Gardens?

Good to see that the Lewes Road scheme keeps collecting awards, the latest being the Excellence in Cycling and Walking category at the National Transport Awards. The Lewes Road scheme, which links Brighton city centre with destinations along Lewes Road, has provided better connectivity for cyclists and walkers, and also provides improvements to speed buses along the way. The £6.4 million project saw nearly three miles of dual carriageway changed into a single carriageway with a new bus lane, widened cycle lane, and revamped bus stops and traffic signals. All of which makes it much easier to travel between the centre of Brighton, the universities, the American Express Community Stadium and Stanmer Park, as well as residential areas.

  

What is amazing is the amount of fuss caused by such schemes when they are being planned and installed. Travelling (by bus) along the Lewes Road in the peaks last week, I’d observe that everything seems to be working pretty smoothly. It is hard to believe the brouhaha about the Lewes Road  scheme, which some seemed to think presaged the end of the world as we know it. But, as the endowment effect,inertia bias and the status quo bias from behavioural economics show, people hate to have things taken away from them – even when what replaces it is better.

Before: Lewes Road at the Vogue Gyratory - note cyclists

The Lewes Road scheme is one of a number of sustainable transport improvements around Brighton and Hove, which have included investing in better bus services, installing cycle contraflows and 20mph zones, as well as upgrading public spaces. These schemes, designed to change people’s transport behaviour by making it easier to take low-carbon options, have featured in a recent approving blog post by a staffer at the ClimateChange Committee. The post notes that, against a worrying national trend towards increasing carbon emissions from transport, developments in our city like the Lewes Road scheme and others,  

“make walking, cycling and taking the bus a much more attractive option. Car ownership in Brighton is currently the lowest in South East England, cycling to work doubled between 2001 and 2011, as did the number of bus journeys between 1993 and 2013.”

With the change in administration that took place in May 2015, and the switch to a Labour-controlled council, another long awaited scheme, for Valley Gardens, has been put on hold pending further work on traffic modelling. Let’s hope that this doesn’t mean that the long overdue improvements to the City’s main gateway, from St. Peter’s Church to the Palace Pier, has been kicked into the long grass, never to be seen again. Because if it has, it’s the worst possible news for pedestrians and cyclists, and anyone one else who believes that Valley Gardens deserves a better fate than being a congested and fume-laded traffic corridor, a river of vehicles which currently divides our city.

Economics, Behavioural Economics, Cars and Car Clubs

Today, the car club firm Zipcar, which acquired another car club firm, Streetcar in April 2010, is withdrawing its cars from Brighton and Hove and re-deploying them to London: good news for Londoners, and good news for City Car Club, which is now the only car club in Brighton and Hove. As a transitional deal, Zipcar is providing a year’s free membership to City Car Club. And Zipcar members will still be able to hire Zipcars in other locations, both around the UK and in Canada and the US.
Thinking about Zipcar’s departure from Brighton got me pondering how conventional economics and behavioural economics could help explain what’s going on here. Conventional economics would explain that providing a service like a car club (sometimes known as car share) means sweating the assets to the max – the costs are mainly fixed (capital cost of the car, insurance, cost of the parking bay etc), which makes it important to hire out the cars for as many hours a day as possible. It’s clear from Zipcar’s decision that this is going to be easier when the cars are parked in London. So why weren’t the people of Brighton and Hove using the Zipcars more often?

Behavioural economics (which I teach) can help explain this. A car club is a substitute for owning a car. But giving up your car is not easy: we hate to give things up. Human beings are loss-averse - psychologically, the “pain” we suffer from a loss is more than twice as much as the benefit we feel from an equivalent gain.  Adam Smith (picture from wiki), the man on the back of the £20 note, is sometimes described as a prototypical behavioural economist. In the Wealth of Nations he said, "we suffer more... When we fall from a better to a worse situation, than we ever enjoy when we rise from a worse to a better.” Consumers view parting with an already owned good to be a greater loss than the potential gain from acquiring another good of equal value.

In 1979 Daniel Kahneman and Amos Tversky published Prospect Theory: An Analysis of Decision Under Risk.’ This seminal work of behavioural economics charted objective and subjective gains and losses with respect to a reference point, as opposed to the standard utility function of conventional economic theory. The shape of the curves using Prospect Theory illustrates that we focus on what we might lose, rather than what we might gain - thinking about selling something, we think about the things we'll miss, rather than the hassles of ownership. Combined with the status quo bias, this means that people prefer situations to remain static and unchanged. Change of ownership would disrupt the status quo, causing unease.

“Giving up” something like a car feels like a big loss: studies show that the perceived benefits need to be at least double the perceived losses to persuade people to give something up. A consequence of loss aversion is that people tend to place a higher value on a good that they own compared with an object of identical value that they do not own. This is called the endowment effect, and it means that people value things differently depending on whether they are gaining or losing them. Loss tends to be felt more keenly than gain.

And the latter means that ownership weaves it’s own spell, making it even harder to let go: people become attached to objects that are in their possession and are reluctant to part with them, even if they would not have particularly desired the objects had they not been endowed with them.

And there’s something else. Zipcars were pretty discreet. Nice cars, usually VW Golfs. You had to look hard to spot that they were Zipcars. No doubt it was a marketing decision to put them on the street practically unbranded. City Car Club cars are different: the company logo is emblazoned on the side. They get noticed. Unlike Zipcars, they are salient. And salience, the extent to which something stands out from its surroundings, translates in behavioural economics to a tendency to over-weight certain phenomena, which may then account for bias in decision making.  Zipcars, lacking salience, weren’t “front of mind.” So maybe fewer people were aware of them, fewer people who might join up and use them, which meant less sweating of those assets. Which was where we came in… And, as far as Brighton is concerned, where Zipcar goes out.