In this blog post, I'd like to share a relevant example of Stigler's capture theory that is happening right here on grounds. I know I am not the only one to lament the construction of the 7 foot metal fence that now prevents UVA students from crossing the train tracks on their way to class. Cutting across the tracks saves some up to 15 minutes of time per cross; with the fence, students will lose hours of time a week taking meandering routes to class and the corner. The fence's construction illustrate's Stigler's point that regulation is sought out by the industry and is designed and operated for its benefit. As NBC local news reports, the railroad that uses the track, CSX Buckingham Branch Railroad, sought out the regulation from local government, working with UVA to cite concerns over student safety. While I do understand this concern, it is important to point out that no UVA student has ever been seriously injured or killed in years of track crossing. Another potential reason for CSXBBR's new-found concern is the competitive advantage the fence might give them over other railroads and shipping alternatives. A fence guarantees there will be no students around the tracks, and thus the trains passing through will be able to go faster than before, improving their shipping service. The Virginia state government pays for the fence, the railroad incurs the benefit, and taxpayers are told their students are safer. Of the four kinds of favors that Stigler mentions an industry might seek, the fence is most similar to a cash subsidy. The railroad incurs the benefit of the fence that cost $350,000 in state grant money. Perhaps CSX Buckingham Branch Railroad would have preferred the more open ended and direct form of cash subsidy that Stigler mentions, but the railroad nonetheless will benefit greatly from the fence initiative. That is, if the UVA police can stop students from tearing it down.
**Thank you to Russell Bogue, blog post guru, for the inspiration behind this post
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