Flexible tolls and the price of saving time

American Public Media’s Marketplace is reporting on a developing problem facing transportation officials. In Florida, for example, they’re finding that efforts to keep the express toll lanes zipping along by raising the price to keep fewer people from using the high-occupancy toll lanes (HOT) isn’t working when it should.

The problem they’re finding in Florida, Marketplace says, is something that was discovered in Minnesota earlier: People are drawn to high prices.

“And that’s surprising,” said David Levinson a professor of civil engineering at University of Minnesota and a study author. “Our expectation was that when we raised the price, that fewer people would consume the good … which is what you typically find.”

He says you don’t normally think about driving on high-occupancy toll lanes as a prestige good, where people perceive more value as the price goes up.

On the other hand, Levinson says, maybe there is a real value. “So if you’re a ‘type-A’ person you might get some sort of psychological benefit from passing 20 other cars on your way to work. Even if by passing 20 cars you’ve only saved yourself a minute or two, you’re ahead in the race, so as a positional good you think it’s better.”

Mr. Levinson’s and Michael Janson’s study, called HOT or Not (get it?), didn’t suggest that the higher prices carried some sort of cachet, as the Marketplace report seemed to suggest at first blush.

Rather the study seemed to say the higher the price, the worse the penalty in the drivers’ mind for not paying it.

“Drivers likely view the price as an indication of time savings and congestion, suggesting higher prices provide greater time savings,” the study said.

On MnPASS roads, there’s no indication other than the price about how bad the congestion is in the non-HOT lanes. The higher the price, the worse drivers think the congestion is and the more they’re willing to pay to avoid it.

So what should these transportation officials in HOT states do if they really want to use pricing to control the demand for the HOT lanes? Show commuters the actual travel times instead of just the price of the HOT lane.

This graphic from Marketplace about the I-95 scenario in Florida is really fascinating.


People were willing to pay the most money to move at the slowest speed. And the gap in speeds between the HOT lanes and the congested lanes isn’t that great, at least for those with relatively short commutes.

Where do we see this in non-HOT lanes in the Twin Cities? On the I-35E stretch entering Saint Paul that’s posted at 45 mph instead of 55 mph. Every year the Legislature gets a bill to raise it; every year the Legislature either kills it or let’s it die. And yet, it remains a very emotional topic for drivers for the 5 1/2 miles or so of reduced speed. What’s really at stake?

At 45 mph, driving the stretch would take 7 minutes. At 55 mph, it would take 6 minutes. A minute isn’t a lot of time, and yet this is annually one of the more passionate arguments when it comes up.

Why? Because people perceive the value of going faster is greater than it probably actually is. As a commenter said on NewsCut a few days ago, “I just want the feeling I’m moving.”

And people are more than willing to pay a premium for it.

By the way, I haven’t yet seen this year’s version of the “raise the speed limit” bill. It’ll come, just as sure as there’s a spring in Minnesota

  • jon

    Having a flexible schedule at work, and a short commute, I’d like to simply state that people who drive during rush hour are jerks.

    having left the rat race down the interstate into the city behind, on the rare occasion I do find myself in rush hour traffic, I find that everyone is either not paying attention to driving (talking on a phone, doing their makeup, shaving… etc.) or trying to find a way to get in front of the car that is directly in front of them (I assume the rational is because that one car in front of them is the only thing keeping them from going, without consideration for the 100 cars beyond that.)

    Traffic as a whole would move a lot faster if we drove with intent to interfere with traffic as little as possible (i.e. don’t cause an accident, don’t cut people off, do let people in when it doesn’t involve coming to a complete stop, move over to the faster lanes when you have a longer distance to travel and close to the slower lanes when you need to get on and off the highway) problem is when that happens it only takes one idiot to swerve in and out of traffic to cause dozens of cars to hit their brakes and that leads to long backups pretty quickly.

    • This is the reason I take surface streets for my commute even though it might actually take a couple minutes longer.

  • Jack Ungerleider

    I’ve always wondered what the attraction of the MnPass lane was. If the highway is clogged, as it frequently is, I exit and take the so called “surface streets” and get where I’m going in a reasonable amount of time. To echo that earlier comment, it allows me to keep moving. I always like to know at least 3 routes to where I’m headed so I can bail to the second or third option when needed.

    • BJ

      I used to be able to do that. My current location doesn’t have a good surface street route. I’m stuck.

    • John

      My experience is that if the freeway is clogged, so are the surface streets – by people trying to beat the clock.

      I’ve done both, and found that usually, it’s about an even trade. You just feel like you’re moving more on the surface streets, because the stops are controlled by stop lights, not by the pressure waves of cars in front of you.

      When it’s snowing – all bets are off.

      • Jack Ungerleider

        No argument about the timing. Not only does the controlled nature of the city streets make it feel like you’re moving more, it also makes it less likely that some will try to go too fast for the traffic pattern. I got rear-ended on Hwy 280 when the traffic came to a sudden stop and the guy behind me couldn’t stop fast enough.

  • PacketHauler

    Unfortunately in my situation I need to cross the MN river in order to get to my job. MN-77 has been worthless in the morning, and the MN Pass lane on 35W northbound is the only reasonable route to work. Considering that I pass many cars in that lane, it is worth the price to save 10-15 minutes on my commute.

    • Try having to cross the MN river on a bicycle. I had to cross at the Mendota Bridge as the old Cedar bridge has been closed to cyclists for years. It was an extra few miles out of my way…

  • Dave

    If it’s “only” 7 minutes at 45 mph, then why not lower it to 35 mph? Maybe that will be “only” 8 minutes. Why not 25 mph? That’s “only” 9 minutes!

    At 45 mph that’s two extra minutes per day, or ten minutes per week, assuming you can go freeway speeds. Hey, that’s almost 9 hours per year.

    • Well you don’t lower it below 45 because that ‘s the deal the neighborhood made when they plowed it up to put in a highway. And, of course, you’re missing the point. It’s not that it’s only 7 minutes or 8 minutes… it’s that figure minus the difference in how long it takes.

      And, true, it might add up to 9 hours a year. So why not move into the city and save the 9hours if it’s that precious.

      Let’s face it, if you save 1 minute on the commute, that’s 1 minute you’re probably going to waste.

      Driving 45 for 7 minutes isn’t going to kill you.

      • Dave

        I was not missing the point. That 9 hours IS the difference between 45 and 55.

        • But you’re doing the same thing the transportation experts do which is add up insignificant amounts of time to come up with a number that’s significant…. or sounds significant. But it’s not really significant.

          But the 55 mph speed limit on that stretch is only really an issue during non-rush hours, since that dinky two-lane stretch of road is pretty well clogged during that time anyway. For example, when’s the last time you cruised into St. Paul on I-94 at rush hour at the posted speed limit?

  • John

    I live near 394, and we often have to go west to near 494 in the afternoon for kids’ activities. I don’t have a MNPass for the lanes, but since you don’t need one for a carpool, I use the cost of use sign as my guide to decide if I should try to cross lanes of traffic for the 4-5 miles I need the freeway. (If it’s less than $1.50, it’s not worth using the carpool lane).

    Even on a congested day, the frontage road is slower than the freeway – it’s much more crowded than normal by people trying to do the same thing – beat the clock.

    I do like to feel like i’m moving. I’ve become somewhat zen about sitting in traffic, but I see how frustrated people get by a 30 second delay on their trip. It’s too bad, really.

    • Dave

      The question I thought of years ago is, what if you have a MN Pass, but you’re carpooling? There’s no way to disable the sensor.

      • John

        I’ve wondered about that as well. I thought maybe it was like rental cars around Chicago – where you can slide the sensor into a sheath that supposedly blocks it from being scanned.

        Since I don’t have one (or any plans to get one), I haven’t looked into it.

      • PacketHauler

        The MN Pass is in a clear-plastic holster. When you want to move it to another vehicle, or if you are a legit carpool, you just remove it from the holster. You won’t get charged for using the lane.

  • Jeff

    “People were willing to pay the most money to move at the slowest speed.”

    I guess that is one way to see it. Another way is that say that people are willing to pay the most money to avoid moving at the slowest speed. They pay $7 to avoid going 34 miles an hour. The faster speed (50 mph) is 47% faster and the slower speed (34 mph). So, for a short commute that might mean a 10 minute drive vs. a 15 minute drive. Or, more significantly, a 20 minute drive vs. a 30 minute drive. In the grand scheme of things, 10 minutes lost to traffic isn’t that big of a deal, especially if you prepare for it. But, at the same time, I can believe that someone will accept a $7 charge to avoid being 10 minutes late to get their kid to an activity, being late to get to a date, or disappointing their spouse for being late (again!).

  • I say if people are willing to pay that much extra for the perception of going faster, then take advantage of it and milk them for all they can. We can certainly use the revenue to fix up a lot of aging bridges and road surfaces.