Undercover Economist: Commuter literate

I was recently invited to a friend’s wedding in the historic city of Oxford. Wearing our best robes, and with a toddler, a baby, nappies and toys in tow, my wife and I drove from London to Oxford, shunning the alternative of a journey via bus, Tube, train and bus again to the wedding venue. My wife is a keen environmentalist, but not that keen.

On arrival in Oxford, an economic puzzle. It is cheap to park in Oxford’s centre – free, in many areas – but with a maximum stay of two hours, it was impossible to park there for the wedding. I eventually resorted to dropping the family at the city-centre venue and weaving up and down North Oxford’s residential streets for a couple of miles.

I left the car for five hours in a remote two-hour space and hoped I’d get away with it. (I did.) When the wedding was over, I walked back to the car, drove back into the town centre, picked up the family, and drove them home to east London.

I’ve since asked Oxfordshire County Council what they were playing at: they told me that they wanted to minimise congestion, while at the same time supporting local businesses by allowing people to drive into the town centre and spend money.

“The limited-stay parking helps encourage a regular turnover of spaces to maximise the opportunity for such transactions to take place rather than being taken up for long periods by commuters or long-stay parking,” they told me. (They also told me that there are some longer-stay spaces, but they are off-street and priced to discourage long stays.)

I am not sure how to reconcile low congestion with regular turnover of spaces, but anyway the plan backfired in my case. I drove further than I wanted to and spent no money because I was too busy trying to park. And I know a small business based in Oxford where the employees leave every two hours to shuffle their cars into different spaces.

So much for cutting down on driving – or, for that matter, helping Oxford businesses. Beyond these anecdotes – and beyond this particular example – it’s easy to imagine how such regulations can be counterproductive. A Conservative party task force recently recommended mandatory parking charges in supermarket car parks, with the aim – again – of discouraging driving. But in the town where I grew up, the supermarket lay between our house and the congested town centre. A mandatory parking charge might have persuaded us to contribute to the city-centre jams.

This is not to argue for laissez-faire. Driving, it goes without saying, causes congestion, pollution and accidents. I’m all in favour of reasonable measures to discourage it. The trouble starts when the bureaucrats convince themselves that they understand the economy well enough to start tinkering with it by pulling levers here and pushing buttons there.

In both cases the policy starts by aiming to discourage city-centre congestion, and finishes by making silly assumptions – for instance, that shopping trips by car are more essential than commuting trips by car, or that driving to the supermarket is worse than driving to the pub.

Nobody knows when these assumptions hold true. What we do know is that if someone pays a £5 parking charge – or, better still, a £5 congestion charge – then the trip was worth more to them than £5. Tinkering should end there.

The bureaucrats have finally grasped the old economists’ idea that taxes can change behaviour. But they don’t understand that economists like the idea, not as a way to turn citizens into the puppets of omniscient officials, but for the opposite reason – which is that, in a complex economy, omniscience is the scarcest resource of all.

Tim Harford’s blog

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Tim, also known as the Undercover Economist, writes about the economics of everyday life.