Tuesday, September 20, 2016

Bridges - deteriorating public goods

As mentioned in class, bridges (like highways, dams, levees, etc.) serve as a great example of a public good. Bridges do not classify as a perfect public good, because, while nonexcludable, they contain a certain degree of rivalry: too many cars can decrease the consumption of other drivers (similar to people on sidewalks). The free rider problem and the inability to exclude people from consumption produces an opportunity for government provision of bridges and other goods, something Friedman describes in Capitalism and Freedom. Friedman mentions that since high access roads have many entry and exit points, it is exceptionally difficult to charge drivers for the specific roads that they traveled on. High access bridges face this problem to a lesser extent - it is possible to place tolls on states' most highly trafficked bridges. Some states have already implemented tolls, such as the Chesapeake Bay Bridge Tunnel Toll. Since they are public goods, bridges are in part funded by the federal government, in addition to state-raised funds.

Recently, however, state governments need to look into options to "close the gate" and charge drivers for their consumption on bridges, since federal funding for bridges is declining. The Highway Trust Fund is the federal government's main way of funding bridge repairs, yet was projected to go broke in 2015. The trust fund is comprised of revenue from a federal gas tax, so as that decreases, states clearly need to look for alternative sources of funding for bridge maintenance and repair.

Deteriorating bridges and a lack of bridge funding may not seem like a pressing issue, especially since the most famous bridge collapse in the US occurred over nine years ago, in 2007. Yet research into bridge inspection data proves otherwise: 25% of the nation's bridges have exceeded their 50 year lifespan, and of the 600,000 bridges in the US, over 61,000 are rated structurally deficient. As previously mentioned, funding for bridge maintenance and repair is insufficient. According to the American Society of Civil Engineers (ASCE), $76 billion is needed currently to repair or replace deficient bridges. In comparison, Congress has allocated that amount over the past 30 years to states for bridge maintenance.

As bridges continue to deteriorate, perhaps consumers will reveal their preferences by moving to communities that best satisfy their preference patterns for public goods, or in this example, bridges. Tiebout writes in A Pure Theory of Local Expenditures that "moving or failing to move...reveals the consumer-voter's demand for public goods" (page 420). If consumers move from a state with a high number of structurally deficient bridges to a state with a low number of structurally deficient bridges, then they are expressing their preferences for communities with safe bridges, all else equal. It will be interesting to see if citizens will move from brown states (PA, IA) to light pink states (GA, TN), shown in the map by Business Insider below, as bridges, a public good, continue to worsen.

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