Monthly Archives: April 2017

Relatively few houses to buy

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The supply of homes for sale is low:

The national supply of homes for sale hasn’t been this thin in nearly 20 years. And over the past year, the steepest drop in supply has occurred among homes that are typically most affordable for first-time buyers and in markets where prices have risen sharply.

In markets like San Diego, Boston and Seattle, competition for a dwindling supply has escalated along with pressure to offer more money and accept less favorable terms…

About 1.75 million homes were for sale nationally at the end of February, according to the National Association of Realtors. That’s down 6.4 percent from a year earlier and only slightly up from January, when listings reached their lowest point since the association began tracking them in 1999. All told, the supply of homes for sale has fallen on an annual basis for the past 21 months….

Despite the scant supply, U.S. home sales are expected to rise this year, economists say. Fueled by job growth, pay raises and still-low loan rates — and perhaps fearful of being left out as more homes are snapped up and prices rise further — many people are looking to buy.

There are certainly downsides to a low supply of homes, particularly for those with fewer resources. At the same time, the opposite end of the market – a lot of homes on the market – negatively influences sellers. This leads me to a question: (1) how often do we reach an equilibrium in the housing market and (2) how long can such a relatively good balance last once it does occur? In all three cases there is something report on as the pendulum swings between buyers and sellers.

Nature, driving, and states closing “old-fashioned” rest stops

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When money is tight at the state level, one way to save money is to close highway rest areas:

Cash-strapped transportation agencies are shuttering the old ones to save money, or because they don’t attract enough traffic or are in such bad shape that renovating them is too costly. Or, the stops have been overtaken by tourist information centers, service plazas that take in revenue from gasoline and food sales, or commercial strips off interstate exits.

Florida, Michigan, Ohio and South Dakota are among the states that have closed traditional rest stops in the past two years. And a battle is brewing in Connecticut over a proposal to shut down all seven stops on its interstate highways to save money.

But advocates of maintaining traditional rest areas say even if motorists are offered flashier options for pit stops, the ones that sprung up as highways did are still needed for driver safety and convenience. Some view them as a tranquil, environmentally friendly alternative to crowded service plazas and commercial strips…

But unlike service plazas, rest areas on federal interstate highways are prohibited from selling gasoline or food other than from vending machines, the proceeds of which traditionally go to people who are visually impaired. State transportation departments run the rest areas and are responsible for cleaning and maintaining them. That can take a chunk of their budget, depending on staffing and amenities, officials say.

It almost seems quaint that highway driving should be broken up to stops at state rest areas where drivers can experience nature and rest. Can highways and nature go together, especially on a small patch of green land within earshot of the interstate? Highways can of course be used for pleasurable trips but the majority of highway traffic is likely for practical purposes such as going to work or conducting some kind of personal business. In contrast, given our reliance on the trucking industry, the issue of spaces for truck drivers to stop seems like a bigger deal.

Ultimately, this seems to be about whether Americans deserve to have some spaces in life where commercial interests are severely limited or not allowed. Given the encroachment of economic life into many life domains, this change isn’t too surprising.

Which comes first on a mass scale: electric cars or driverless cars?

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The car of the future could be quite different but what exactly it will be is still up in the air. Will it be an electric car? We need some significant infrastructure for that to work:

But here’s the thing. As a piece of new driving technology, the Bolt totally works. But the adoption curves and take-up rates of new technologies aren’t driven simply by the efficacy of the technology in and of itself. New innovations require infrastructure to reach their full market potential. Often that infrastructure has to be built by companies other than those who build the original products. And right now, electric cars remain hindered by a massive infrastructure gap…

Tesla has dealt with the infrastructure challenge by building its own network of proprietary superchargers—stations that only Tesla owners can use. But it’s a closed system, and it is part of what makes Tesla a luxury product. Non-Tesla users are out of luck. And while some of the big automakers are establishing partnerships with charging networks, none has taken it upon itself to build the dense, easily accessible, and highly functional network of charging stations that is needed. So it’s great that the Bolt feels like it belongs in everyone’s garage. But until that gaping infrastructure gap is bridged, it won’t be in nearly as many as it could be.

And working out all the kinks of driverless cars and then making them affordable to the mass market may take a while:

Despite technological advances, accidents like these reduce consumer trust and send companies back a few steps. A true autonomous future is perhaps as far away as 50 years, considering all that needs to happen to ensure safety and prepare the average driver.

While one will see the occasional driverless car zipping tech execs around Silicon Valley, new connected cars will still be out of reach for most families.

The internal combustion engine vehicle with a human driver may prove to have quite the staying power. How about we envision the electric self-driving vehicle for all several decades down the line?

Another thought: given all that would need to be done to completely switch over to either option, could the money and time be better spent on other problems?

Atlanta bridge collapses, traffic isn’t that bad

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Urban highways are often very busy but when they are completely out of commission, it doesn’t necessarily lead to horrific traffic:

You’ll forgive our excessively clinical attitude about this damage—and it’s going to cost tens of millions to fix—but what we have here is a classic “natural experiment” of the kind economists and students of public policy relish. So what happens when we take a major urban freeway out of service for a couple of months? Are Atlanta commuters in for hours of gridlock every day and grisly commutes? Will the region’s economy grind to a halt as a result? We’ll be watching over the next several months to see.

So far, the results are consistent with what we’ve seen in Los Angeles and Minneapolis. Monday morning came, and something funny happened: traffic wasn’t so bad…

So what’s going on here? Arguably, our mental model of traffic is just wrong. We tend to think of traffic volumes, and trip-making generally as inexorable forces of nature. The diurnal flow of 250,000 vehicles a day on an urban freeway like I-85 is just as regular and predictable as the tides. What this misses is that there’s a deep behavioral basis to travel. Human beings will shift their behavior in response to changing circumstances. If road capacity is impaired, many people can decide not to travel, change when they travel, change where they travel, or even change their mode of travel. The fact that Carmageddon almost never comes is powerful evidence of induced demand: people travel on roadways because the capacity is available for their trips, and when the capacity goes away, so does much of the trip making.

If Atlanta can survive for a month or two without a major chunk of its freeway, that’s a powerful indication that more modest steps to alter road capacity don’t really mean the end of the world. If we recognize that traffic will tend to adjust to available capacity, we then end up taking a different view of how to balance transportation against other objectives. For example, this ought to be a signal that road diets, which have been shown to greatly improve safety and encourage walking and cycling, don’t have anything approaching the kinds of adverse effects on travel that highway engineers usually predict.

I do think that this suggests drivers will adjust their behaviors based on what roads are available. At the same time, there is probably a tipping point where reducing too much traffic capacity would make a big difference. This might be especially true in car-driven places like Atlanta and Los Angeles that are known for sprawl. Presumably, places where traffic capacity could be picked up by other transportation options (such as closing the Embarcadero Freeway in San Francisco where driving is already a hassle and other options include BART, Muni, etc.) would fare better. Or, perhaps road capacity has to be reduced gradually so that people have time to adjust and make new choices about travel and where they live and work.

See earlier posts about what happened with Carmageddon I and Carmageddon II in Los Angeles

Nudging people for good or evil

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Like much in today’s polarized world, perhaps you only like nudging when people are being moved in a direction you agree with:

We are living in an age in which the behavioral sciences have become inescapable. The findings of social psychology and behavioral economics are being employed to determine the news we read, the products we buy, the cultural and intellectual spheres we inhabit, and the human networks, online and in real life, of which we are a part. Aspects of human societies that were formerly guided by habit and tradition, or spontaneity and whim, are now increasingly the intended or unintended consequences of decisions made on the basis of scientific theories of the human mind and human well-being.

The behavioral techniques that are being employed by governments and private corporations do not appeal to our reason; they do not seek to persuade us consciously with information and argument. Rather, these techniques change behavior by appealing to our nonrational motivations, our emotional triggers and unconscious biases. If psychologists could possess a systematic understanding of these nonrational motivations they would have the power to influence the smallest aspects of our lives and the largest aspects of our societies…

But in spite of revealing these deep flaws in our thinking, Lewis supplies a consistently redemptive narrative, insisting that this new psychological knowledge permits us to compensate for human irrationality in ways that can improve human well-being. The field of behavioral economics, a subject pioneered by Richard Thaler and rooted in the work of Kahneman and Tversky, has taken up the task of figuring out how to turn us into better versions of ourselves. If the availability heuristic encourages people to ensure against very unlikely occurrences, “nudges” such as providing vivid reminders of more likely bad outcomes can be used to make their judgments of probability more realistic. If a bias toward the status quo means that people tend not to make changes that would benefit them, for instance by refusing to choose between retirement plans, we can make the more beneficial option available by automatically enrolling people in a plan with the option to withdraw if they choose…

Lewis does not discuss the ways in which the same behavioral science can be used quite deliberately for the purposes of deception and manipulation, though this has been one of its most important applications. Frank Babetski, a CIA Directorate of Intelligence analyst who also holds the Analytical Tradecraft chair at the Sherman Kent School of Intelligence Analysis at the CIA University, has called Kahneman’s Thinking, Fast and Slow a “must read” for intelligence officers.

This seems like a reasonable point – people can be pushed toward positive and negative behavior – but it still leaves a crucial question: who gets to decide what is worth pushing people toward? Is it manipulation when it goes a direction you don’t want but progress when it goes your way? The two major examples of this playing out in society don’t help much; we may wish that big corporations and national politicians have less ability to sway people but this is also part of having a lot of power. (Similarly, power can be used to benefit people or harm them.) Are we more okay with an individual having biases rather than larger social actors (who can coerce a lot more people at the same time)? If so, then it may be harder to have a large society that functions well.

Explaining why suburban voters are seeing fewer contested local gov’t races

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Compared to previous years, suburban voters going to the polls together will have fewer choices:

Barely 30 percent of the hundreds of races being decided Tuesday are contested, according to a Daily Herald analysis. That’s down from about 45 percent of races that were contested in local elections eight years ago…

Experts believe there are many reasons fewer people are running for local offices, from the cost of campaigns to the incivility of social media. The effect is voters more frequently must settle for someone who is merely willing to serve rather than choosing the best candidates from among a field of contenders…

The exodus from local candidacy in part is a result of growing personal and professional demands for many people, making time to attend board meetings scarce, experts said.

The downside of public service also dissuades some potential candidates, they added.

Given all that we have heard in recent years about dissatisfaction among the electorate, it is interesting that this doesn’t appear to translate into wanting to get into politics to change things. Shouldn’t the Tea Party or Occupy Wall Street or Black Lives Matter or Trump supports have flooded local elections with an interest in changing government and society?

When you talk to local officials, they often tell of getting into politics to address practical local issues – these are not often ideologues with grand ambitions. (Thus, it is unusual when a local politician gets involved with national politics such as the recent story in the New York Times of the Bolingbrook mayor and Donald Trump.) Is it simply easier to be angry with government and the disavow any need to participate? (And don’t forget that voting in local elections is often quite low.)