The Economics of Bike Lanes

Lynne Kiesling

As a celebration of impending spring, I give you economics journalist Olaf Storbeck’s sound analysis of the economics of bike lanes. His prompt for writing was a rant from John Cassidy in the New Yorker about the tradeoff between bike lanes and “free” street parking spaces. Storbeck’s analysis is thorough, and goes beyond the oft-forgotten “street parking isn’t free” (citing the oft-forgotten work of Donald Shoup on that subject) to mention the network effects of having a more interconnected set of bike lanes (with a shout out to my very interesting colleague Mathias Doepke in the process!)

Storbeck accurately, I think, pinpoints the fundamental question: “Should the government promote cycling?” Here we probably disagree somewhat; he argues that it should, based on the health and environmental effects of substituting into cycling and out of driving. I am more concerned about the top-down imposition of a particular value judgment and the paternalism inherent in such a position than he is.

I don’t take the same normative position as he does, but I do favor making bike lanes explicit on high-traffic streets from a more Coasean perspective — bike lanes define property rights more clearly, and contribute to more coordinated and more peaceful shared use of a common-pool resource. For me that’s the primary economic reason to take the normative position in favor of bike lanes. More clearly defining property rights will reduce the costs associated with the decision to bicycle, so at the margin it will lead to the desirable outcomes he wants.

I am really looking forward to getting outside on my bike. For Christmas this year the KP Spouse got me a SRAM Force groupset of components for my bike (don’t worry about what that is if you aren’t a cyclist, it’s spiffy gears and shifters etc.), and I’ll be taking them on their maiden voyage next week in North Carolina, where we’ll be attending a “spring training” bike camp to work on mountains and hill climbing.

Happy cycling!

3 thoughts on “The Economics of Bike Lanes

  1. The Dutch have AMAZING bike lanes (often on the pedestrian side of parked cars), which goes with (endogeneity) their VERY heavy use of bikes. I also see that DC has started the same system on some streets. Berkeley, of course, has had bike boulevards for awhile (streets that are blocked to thru passage of cars)

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