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The Economist has a tangential discussion on the government's failure to encourage people on to public transport this week, intended as a cautionary tale lest anyone get too excited by proposals to write carbon emission targets into law. This includes a graph of the cost of various forms of land transport which suggests that driving is the only form of transport which has gotten cheaper since 1980. I was surprised by this and did some more digging which I will discuss under a cut.

They've included what I thought was a really interesting graph (one is supposed to be able to get it from here online, but I found that I had to download it in MPEG-4 format.

In short, it claims to graph costs of various forms of land transport since 1980. In that time, bus and train fares have (they claim) risen by 40%. Petrol prices have risen approximately 20%, and the "total cost of motoring" - including the price of a car and running costs, apparently - is claimed to be 15% lower than in 1980.

Now, I'm slightly skeptical of this - if nothing else, if this were unequivocally true, I'd expect Greenpeace, Friends of the Earth, etc to be all over this every time the AA gets up to complain about the cost of motoring. Am I being overly skeptical?

It strikes me that 1980 is a dodgy place to normalize the prices to - the Iran/Iraq war, the Iranian revolution and panic in the US all elevated the price of oil to levels which (in real terms) don't seem to have been reached again (Judging by this page, of which I know nothing other than it appears to be a fairly sober futures site. A similar graph can be seen from Wikipedia.)

If we look again at the graph and pick 1990 instead of 1980 as our starting point, we find that fuel prices have risen by approximately 50%, as compared to increases in bus and train fares of about 18%. The "real cost" of motoring is still slightly lower in 2006 than in 1990, though given the issues around start date I'd like to see more details of that calculation before I trust it.

I guess there are two options - that the Economist just screwed up in their choice of start date, or that they chose it deliberately to make the graph look damning. If the latter, I'm slightly surprised - I tend to think of the Economist as being in favor of lower taxes and less government intervention, whereas here they would be recasting the statistics to argue either for more taxes or more government subsidies to public transport or both!

Is this some new, more statist/environmental Economist of which I knew nothing?
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November 2013

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