Light, heavy, or high speed? Evaluating passenger rail in San Jose

VTA costs soar and ridership plummets (see article nearby). Overpriced and overbudget high speed rail project misses deadlines. What to do? Matthew Holian, professor of Economics at San Jose State University, explores the cost/benefit analyses of local rail options for San Jose at a recent Saurman Provocative lecture at San Jose State.

There are many theories for what caused the industrial revolution, but I think all economists would agree that innovations in transportation were key. They linked together areas that were formerly too far and economic activities were able to take place between these areas, trade and specialization advanced. Perhaps it’s not an overstatement to say that transportation innovations have had a very large role in helping us enjoy the quality of life that we enjoy today.

San Jose is pretty much the lowest in terms of the revenue over the operating costs. However in terms of operating costs you can see it’s actually somewhere in the middle. The way to characterize the VTA light rail system is that they have low ridership, but the costs are not high necessarily compared to other systems. They’re not the lowest, but they’re not the highest either.

I’ll tell you what’s behind my comment that most of these long distance routes are probably inefficient. Recently the Brookings Institution did a study about Amtrak and looked at their various routes. Amtrak has a system map that looks kind of similar, in fact more extensive than that map that I showed you before, they’re not high speed trains. Nonetheless, what they found is that these long distance routes are the least efficient ones, and the only Amtrak routes that are either efficient or close to being efficient are short ones. So it seems that it’s inherent in the nature of trains that you know they’re good when you need to get relatively medium to short distances, but if you need to go long distances, they’re just too slow and planes are cheaper, and the benefits just aren’t there.

Watch the whole speech here.

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Image by Richard Masoner