For whom the bridge tolls: a Seattle lesson in behavioral economics

Route 520 Bridge across Lake Washington

In 1979, near the end of my first decade as a journalist, I had occasion to write about yet another of life’s many anomalies. For Philadelphia’s Evening and Sunday Bulletin (like the Seattle Post-Intelligencer, now deceased in print). I described the slightly bizarre habits of motorists faced with a differential in tolls. Crossing the Delaware River separating New Jersey, they had a choice.  For 39 cents (with a monthly pass), they could whisk across the sleek Betsy Ross Bridge, an eight-lane span newly built by the local port authority and soaring above the crowded river below, rarely having congestion even at peak times. Or for a dime, they could choose the ratty Tacony-Palmyra Bridge, an aging four-lane drawbridge a few miles to the north run by a rival governmental agency and possessing an annoying propensity to open at rush hour’s height, creating massive traffic jams and endless delays.

To put it bluntly, Tacony-Palmyra stuck it to Betsy Ross. The former handled nearly six times as much traffic as the latter. This was so even though for almost all drivers, the 29-cent savings in toll was more than spent in extra gas, let alone car wear-and-tear and time. Tacony-Palmyra operators were well aware of how much their business model was based on stupid customers. As one bridge official candidly told me with a smile, “They don’t know how much they spend to save it.”

So for me, being New To Seattle, it was a little déjà vu as I watched the re-imposition of tolls last week on the Route 520 Bridge–excuse me, the Governor Albert D. Rosellini Bridge-Evergreen Point, as it officially is named so as to distinguish it from all the other Governor Albert D. Rosellini bridges elsewhere. The Lake Washington crossing connects Seattle and the city’s eastern suburbs. Like the Philadelphia area, motorists have a choice–actually, several choices. They can use the world’s longest floating bridge and at peak times pay $3.50 (adjusted for inflation, about triple the 39-cent tariff in 1979 for the Betsy Ross). Or they could add about seven miles to their route (roughly double the Delaware River detour) by going south and taking Interstate 90 across Mercer Island for free. Or, depending on start and end points, they could go around the northern or southern end of the lake. This would be toll-free, too, although adding as much as 20 miles and a half-hour to a trip.

The 520 bridge tolling is a fertile ground for those who examine behavioral economics. Broadly defined, that’s the study of how psychology affects one’s spending decisions. Economically, one would think people act rationally in their own self-interest. But they don’t always. This is not junk science; experts in behavioral economics have won Nobel Prizes.

The eggheads would have a field day in Seattle.

As I see it, people worry mainly about the money they spend up front. Most don’t care much about added long-term costs (perhaps in the form of frequent replacement) or hidden expenses, like the value of their own time. They should, but they don’t.

The business community, on the other hand, is quite aware. That’s how Walmart parleyed cheap prices and cheaper quality into the world’s largest retail operation. It’s the reason Amazon.com charges less than in-store prices, even though by all reason the time-saving convenience of Internet shopping (not to mention no car costs driving to the mall)  ought to command a premium, not a discount. Knowing that customers don’t value their time well, airlines make them get to the airport earlier, wait in longer lines, lengthen the running time of trips and still raise prices sharply.

One thing studied in behavioral finance is how the way the initial reference point is framed can affect choices. Three decades ago in Philadelphia, the difference between the tolls was only 29 cents. But many drivers apparently chose to view the higher (39 cents) as a whopping and avoidable 290% more than the lower (10 cents). Today in Seattle, the rush-hour difference is $3.50, and with a free option the multiple is infinitely bigger (mathematically, it can’t even be calculated).

But over time, things can change. These days, the Tacony-Palmyra apparently is still sticking it to the Betsy Ross (I say apparently because when I called the Tacony-Palmyra offices yesterday, I actually was told the traffic count is top secret due to 9/11 security concerns). But looking at available data–the Internet, after all, is a big space–it seems the gap over the Betsy Ross has narrowed from 6-to-1 to something like 4-to-3. Besides avoiding congestion, one reason might be that the Betsy’s current toll–$5.00 for a round-trip–while a lot higher than in 1979 is only 150% more than the Tacony’s current $2.00 round-trip. Percentage-wise, the spread is less.

Competitively, Washington State, which owns the 520 Bridge, is playing a relatively weak hand when it comes to revenue enhancement. In Philadelphia, while the Betsy Ross faces cut-rate competition (a la, say, Southwest Airlines), there aren’t any no-toll options short of swimming to crossing the Delaware (unless one makes a 60-mile detour north to the nearest free bridge at Trenton, N.J.).  Here, to goose the bucks, the folks in Olympia might be able to put tolls on the I-90 bridges, which it also controls, but that likely would take years to enact. Meanwhile, there isn’t anything to stop those around-the-lake free routes.

Hello, Renton! Nice to see you, Bothell!

The Seattle media is in a tizzy trying to figure out how new traffic patterns will shake out in light of the tolling. For me, it’s a no-brainer. I predict a large number of motorists will desert the bridge and stay away as long as they possibly can. If that happens, it would not represent anything that is rational, at least on any measurable basis. But it would be explainable. Just the latest of life’s many anomalies.

Follow William P. Barrett’s work on Twitter by clicking here.

Share on Facebook

Comments

For whom the bridge tolls: a Seattle lesson in behavioral economics — 9 Comments

  1. Pingback: Seattle toll system should have received an F - New To Seattle

  2. Pingback: Good To Go system in Seattle takes its toll - New To Seattle

  3. Pingback: Calling all behavioral economists: Stay in Seattle | New To Seattle

  4. Pingback: Different search engines see a different Seattle | New To Seattle

  5. Pingback: In Seattle, an anti-government protest over bridge tolls? | New To Seattle

  6. I modified the story. But I can’t say I agree that the current online incarnation of the Post-Intelligencer is “a fairly healthy enterprise,” as you suggest. Since I became New To Seattle, I don’t think that a single person has mentioned to me anything seen on the site, the local content of which seems to be taken mainly from other sites. This is not true of some other Seattle-news-oriented sites like Public Cola and Seattle Bubble.

  7. If there is a sharp increase in bus ridership and it is sustained, that would be noteworthy. When I lived in L.A.–which doesn’t have toll bridges or roads–and the price of gas went up, there was a slight increase in mass transit ridership for a bit, but then it trailed off.

  8. The numbers to watch will be the increases in bus and alternative transit usage. No doubt many people are simply ‘driving around’ to avoid tolls, but in my case (and anecdotally hundreds of other cases that i’ve seen), the addition of tolling was the final push towards me taking the bus across the lake.

    At this point, my analysis is based on total savings, and I don’t consider the tolls as part of the equation. Rather I’m now calculating the gas not used and maintenance not required and comparing those to the time I’m losing (which is significant given the new, traffic-free bridge deck).

Leave a Reply