Today thousands of cyclists around the country hit the streets for Bike to Work Day in the United States. In a country dominated by the car, bike transit - as opposed to recreational cycling - is still somewhat of a novelty. Even in large, densely populated cities, you’re more likely to find shared cars than shared bikes. And despite the fact that a car costs 40 times more than a bike, daily fees for renting bikes often exceed those for renting a car. (See WashCycle for a good missive on this.)

But several major cities in Europe have embraced the idea of shared bikes. Shared bikes are low-cost rental bikes parked at stations across the city, optimized for one way trips. For-profit companies like Cyclocity or SmartBike work in conjunction with city planners to help link transportation nodes that are too close for a bus or car, but too far to walk. And unlike shared cars which must be returned to the same parking space, bikes can be returned to any station in the system.

Members provide a refundable deposit (~$200) and pay a nominal annual fee (~$15).  Whenever they need a bike, they simply swipe a card to release an available bike. Rides under 30 minutes are usually free, with increasing fares after that. Most bikes have internal gears and solid tires minimizing muss and fuss - ideal for commuters.

Paris announced this week that it is introducing 20,600 shared bikes at more than 1,400 stations across the city by July 15. The idea has been popular in other European cities, from Lyon to Munich, but with nearly one shared bike for every thousand Parisians, the Bastille Day rollout is nothing less than… revolutionary (see statastic below).

Several US cities including San Francisco, Portland, and Chicago are studying the idea of shared bikes, but it looks like Washington DC will be the first American guinea pig. Early indications are that the DC plan will initially be modest. Like shared cars, shared bike systems greatly benefit from network effects. But now that the planet is heating up, this is no time to be modest. The more shared bikes, the more locations near potential riders, and the users more likely to give it a try, the more profitable, etc.

So can DC match the French passion for shared bike? Not just yet. In order to have the same density of shared bikes in DC as in Paris, Washington would need 5,700 bikes or about 80 Smart Bikes per square mile. And if shared bikes help gets tourists off of those goofy Segways, all the better.

Previously, I hypothesized that widespread adoption of the shared cars would decrease demand for streetside parking (especially with this concept), allowing for more, safer bike lanes. Shared bikes and shared cars could easily work in harmony with one another - there are certainly times when you need a car. But it is time for local leaders to shun the one-car, one-driver paradigm and shared bikes are a great way to start.

.

.

.

.

.

Today the US Postal Service (USPS) rolls out its new “forever stamp.” The same stamp that you buy today will still provide postage for a 1 ounce letter in 2017 or even 2107.

So are the forever stamps a bargain for consumers or the Postal Service? A little of both. They eliminate those annoying 1 and 2 cent stamps for consumers and smooth revenue for the USPS. Maintaining consistent pricing has been a challenge for the Postal Service. Looking back at the inflation-adjusted price of stamps since 1945 (for nominal prices, check out spudart), stamps have ranged from $.22 in 1956 and 1957 to $.49 in 1975.

Historically it was difficult to hone price increases to match inflation for one simple reason: we don’t have a currency smaller than the penny. Raising the price from $.03 in 1957 to $.04 in 1958 constituted a nominal 33% price increase. Today a 1 cent increase only means a 2.4% price increase. The implication is that with more expensive stamps, it has become easier for the USPS to track inflation keeping the real cost of stamps more consistent. Expect this to continue in the future as the USPS ties the price of the forever stamp as closely as possible to inflation. Regardless of their effort, it seems likely that a secondary market in forever stamps will crop up. Why? Arbitrage.

According to the USPS web site, there is no limit to number of forever stamps you can buy. So someone playing in the futures market of stamps (statastic is not promoting this) would wait until the day before the next forever stamp price increase. An investor would fork over $4.1 million to buy ten million forever stamps the day before the next penny price hike. By holding a futures contract guaranteeing a buyer for all of the stamps at 41.9 cents each, the speculator could turn an overnight profit of $90,000 - assuming the USPS doesn’t make this illegal first.

.

Chinese President Hu Jintao is visiting Moscow today to discuss increasing petroleum exports to China. That’s if he doesn’t first blow his budget on a hotel room in Moscow. The Russian oil boom has propelled Moscow to the top of the list of most expensive cities in the world. But the concentration of wealth in the former USSR capital belies the truth about the true state of the former Soviet Union.

Today the fifteen countries that once constituted this superpower stand at odds with one another in terms of economic opportunity, human rights, and development. The Baltic states of Estonia, Latvia, and Lithuania are soaring as members of the European Union and NATO. Estonia was ranked top in the World Liberty Index, with its Baltic neighbors not far behind. Meanwhile Turkmenistan’s eccentric (and recently deceased) President Niyazov spent his country’s resources cultivating world class repression, bested only by North Korea.

Elsewhere, oil resources elsewhere combined with a bungled move to private markets after the fall of communism have produced a kleptocracy across the former Soviet states. Outside of the Baltics, all of the former Soviet states now rank amongst the most corrupt countries in the world. On the bright side, communism does seem to have some positive lasting effects when it comes to equality. Five of the top ten most equal countries are from the former USSR.

Having shed the planned economy, these countries have all taken wildly different paths. But what if the USSR existed today? Statastic used several different development indicators and weighted them for each country based on population (one caveat: Russia constitutes 50% of the population of the former USSR). These statistics were combined into a new rating for USSR based on the latest survey data for various development indicators.

Taken as a whole, the USSR is not a very nice place to live 16 years after the fall of communism. Corruption in the USSR is comparable to that in Libya or Rwanda. The countries of the USSR today have less economic and individual freedom than the Democratic Republic of Congo. Even the USSR’s crumbling socialized medicine contributes to a mediocre score in the United Nations Human Development Index. Today the USSR ranks at the same level as its long-forgotten communist friend, China.
.

Today is the 4th anniversary of the start of the War in Iraq. Four years must seem like an eternity for the families of those who’ve been deployed. But for the Americans sitting at home, flipping the channel away from the latest carnage in Baghdad, four years is little more abstract. Of course, for your beloved Fido, four years is one third of his life. And if you bought a pet rat at the start of the war, chances are it’s going to expire any day now. So Statastic decided to see which species could outlive this war if they were born on March 19, 2003.

Experts and politicians have been a little divided over the past four years about exactly how long this war would last. If Dick Cheney had been right when he notoriously predicted in March 2003 that it would be over in a matter of “weeks rather than months,” then the perishable dragonfly could have outlived this war. Or if Donald Rumsfeld’s most pessimistic estimation of a 6 month war had been correct, a monarch butterfly could have outflown the conflict.

We even had a chance of keeping your pet hamster alive if Ohio had tipped John Kerry’s way. He would have started withdrawing troops at about this time in 2005. Now it’s up to a new crop of Democrats to make promises, underbid one another on withdrawal timelines, and hope that the public notices that’s we’re 2 hamsters into this war when they got to the polls next fall.

Today’s statements from President Bush that “success will take months, not days or weeks,” indicate that this war will likely continue through 2008. Three Republican frontrunners [Giulliani, McCain, Romney] have all supported the president, proposing that we maintain or increase current troop levels. It seems that if Americans elect another Republican president, the War in Iraq may have the same life expectancy of the Tasmanian Devil it has come to resemble.

Unfortunately, the war has proven capable of outlasting our own species. More than 60,000 Iraqi civilians and 3,217 U.S. troops have died since the beginning of the war.

.

Last July I wrote about the inequity of prize money between women and men who play at Wimbledon. The twist is that women play the best of three sets, while men play best of five. So women champions spend much less time on the courts:

Over the past five years (2001-2005), Wimbledon Men’s Champions - usually Roger Federer - have played 53% more sets (and 66% more games) en route to the championship than the women’s champions during the same period. If the averages hold up for 2006, the Gentlemen’s Champion will have earned $51,376 per set played while the Ladies Champion would take home $75,126 per set played at Wimbledon. There you have it: women earn 46% more than men at Wimbledon.

Yesterday, Wimbledon announced that it will pay equal prize money to men and women. While I support equal pay for men and women, I also support equal play. Women should play best of five sets just as men do. It makes for some of the most exciting, suspenseful tennis matches on the men’s side. And too many women’s tennis matches are lopsided 45 minute affairs - hardly ideal for the TV ratings. Introducing the stamina factor might even out the women’s field.

There is no physiological reason that female tennis players couldn’t pull through a grueling five hour match as some men do. Women run the same marathons that men run, play on the same sized soccer fields, and work the same 40 hour week that men work.

But what if the Wimbledon standard were applied to life? What if equal pay could be earned by someone even though it only required 66% less work? Or put another way, what if women paid the same amount but received 51% more in services or products? Courts would be smaller, hoops wider, bank lines shorter, sandwiches more delicious. The world would certainly be easier (I especially support the new Wimbledon holidays and the longer Wimbledon hot dogs), but would it be fair?

.

BBC World news was aflutter today over the results of the The United Nations Children’s Fund (UNICEF) report entitled, “Overview of child well-being in rich countries.” The Brits, it seems have taken over a place normally reserved for the United States: coming in dead last in child welfare.

The report takes a more inclusive approach to the measurement, and data quality varies widely across the rich nations that it surveyed, but the UK is at the bottom in many categories. Rest assured, America is still #1 in several categories, including: relative child poverty, percentage of single parent families, and the lack of overall health and safety for children. Paradoxically, while our children report getting plenty of exercise, they are also the second fattest (it seems that those pesky Maltese children edged us out).

Another seeming paradox is that one of the most tolerant countries on earth, the Netherlands, has many fewer children engaging in risky behavior than the United States. Of course, any Dutch person you ask will insist that this isn’t a paradox at all. The point of lax drug laws is to help demystify marijuana and other drugs for teenagers. Perhaps they have a point, about 50% more American 11 to 15 year-olds have smoked pot in the last 12 months compared to their Dutch counterparts. It might be worth listening to the Dutch - they came in first in the survey of child welfare among rich nations.

Below are some of the more interesting results from the report.

.

.

If you love football and gambling in the stock market, then do I have the place for you. Keith Jacks Gamble analyzed how the gambling odds were affected by each play in the Super Bowl as he explains:

My analysis uses a market-based measure of the probability impact of each play, which builds in how a play affected the market’s expectation of future plays. For example, Protrade’s analysis estimates that Hester’s TD return (their 2nd highest impact play) gave the Bears a 70% chance of winning (20% increase), whereas my analysis estimates that the Bears had a 42.75% chance of winning (10.25% increase, just out of my top 5) following the TD.

If you watched the game, it will come as no surprise that the biggest swings in the odds of winning came on negative offensive plays (e.g. interception) rather than positive ones (e.g. touchdowns).

The odds that of the Colts winning only increased by 10.5% when Peyton threw a touchdown, and only 5.75% when Rex Grossman found the end zone. Apparently not losing the game was more important: Rex throwing an interception decreased the odds of a Chicago win by 22.75% versus Peyton’s 5.75%.

There is a difference in the quality of interceptions thrown by each of the quarterbacks. Peyton might throw a few picks, but in general they weren’t as dangerous or they weren’t at key times in the game. In contrast, when Rex threw an interception, it might culimanate in a touchdown dance by the defense. Indeed it was that exact play by Hester that sealed the fate of the Bears. This is something that Bears fans suspected all season: Rex might throw throw some valuable touchdowns, but his interceptions hurt the team more.

Statastico supports the Minnesota Vikings and Stephen Colbert, so I’m hopeful that these godless killing machines will be hobbled by keeping Rex as their starting quarterback next season.
.

President Bush’s 2008 budget hit the Hill yesterday to a frosty reception (so much for global warming). The budget is like having an accountant hold a mirror up to American society, and that society is simultaneously warlike and childish.

Almost half of your income taxes will be spent on national defense, and that doesn’t include the interest on debt from previous defense overspending. The Pentagon will spend 6% of its budget repairing and replacing equipment (mostly for Iraq), but it’s still more than the entire foreign affairs budget for 2008. Diplomacy from the barrel of a recently-repaired gun.

The budget also reveals that we are spending money like spoiled trust fund kids - but without the trust fund. Paying for the $261 billion in interest payments on our past indulgences takes up most (83%) of the revenue collected from corporate taxes. Lest you think that we should cut taxes to spur the economy, may I remind you that tax cuts still don’t pay for themselves no matter how many times Bush insists that they do. In fact, between 2008 and 2012, the Bush tax cuts will cost the Treasury Department more than one year of unemployment and welfare benefits combined.

Gift and inheritance taxes collect enough revenue to pay for nearly all of our national science and technology budget. So if you actually are a trust fund kid and think that so-called death taxes are unjust, consider that they might help keep grandma alive for a few more years. Or was that the point of cutting them?
.

Source: Washington Post

In the Saturday Op-eds, The Washington Post again called out the Bush administration for falsely claiming that tax cuts pay for themselves. Tax cuts pay for themselves in much the same way that a ten cent coupon pays for a can of soup. Yes, some tax cuts help stimulate the economy, but no study has found that tax cuts are self-funding.

Estimates range, but a sample of three non-partisan studies indicates that income tax cuts do not pay for themselves - not even close. Most studies indicate that tax cuts do increase personal income and consumption, resulting in a very moderate economic stimulus. But this minor boost in economic growth does not replenish government coffers. For every $100 lost to tax cuts, the government only recoups between 10% to 28% due to economic growth. Even former chairman of President Bush’s Council of Economic Advisors, Gregory Mankiw’s most rosy estimates demonstrate that tax cuts lose 50% of their value.

So tax cuts cost the government money. End of story. Unless you’re the president writing an op-ed in the Wall Street Journal:

It is also a fact that our tax cuts have fueled robust economic growth and record revenues. … The bottom line is tax relief and spending restraint are good for the American worker, good for the American taxpayer, and good for the federal budget. Now is not the time to raise taxes on the American people.

Tax relief has benefited the American worker - as long as you’re talking about the American worker in a household making more than $100,000 per year. According to a study by the non-partisan Tax Policy Center, last year’s tax “relief” amounted a whopping $68 to the 125 million households making less than $100,000. Meanwhile the 20 million earning more than $100,000 received an average of $2,861 per household, 42 times more tax relief than those at the bottom of the income scale.

Indeed, now is the time for Democrats to end Bush’s tax cuts for the rich.

And if you have to pour over tax policies in great depth, I would recommend Tim Hecker’s album Harmonies in Ultraviolet (number 14 on Pitchfork’s best of 2006): ambient static and dissonance for blogging in the middle of a rainy night.

*Mankiw: Income Tax Cut measured with dynamic scoring

Sources: Washington Post, Congressional Budget Office, Wikipedia, Tax Policy Center

Car-sharing is gaining popularity in cities across the United States. The idea is simple: car-share companies or cooperatives park hundreds of cars in convenient locations that any member can rent by the hour. Most car-share programs cost about $8 to $12 per hour, including gas, insurance and maintenance.

On the face of it, car-sharing is a economical and eco-friendly way to get around. Zipcar has about 40 members sharing each car in their national fleet. That’s certainly better than 1 car per person, right? Perhaps. If your goal is to reduce the total area dedicated to parking a vehicle, it does indeed free up valuable urban space. If, however, your goal is to reduce traffic congestion, smog, or reliance on fossil fuels, the jury’s still out.

Car Sharing Increases Mobility - and Traffic - Amongst Urbanites

Car-sharing is most appealing to urbanites who choose to live in densely-populated cities in part to avoid car ownership. Zipcar and Flexcar have both built a business model on enhancing the mobility of these groups. The consequence of increased mobility, unfortunately, is that more urbanites are driving alone. According to a study sponsored by the Federal Transit Administration, 26% of users reported driving more as a result of car sharing.

Flexcar and Zipcar are for-profit companies, and each has recently received $20 million in investments. Those investors expect profit, and that profit will be generated largely by getting more people to drive more of their cars. Most privately-owned cars spend 95% of their time parked. Shared cars have much higher usage rate - most users are unlikely to pay $10 per hour to just to park their car somewhere (which is why commuters who drive to work are unlikely customers for car-sharing). In short, car-share companies generate revenue when people drive those cute little Zipcars around town. (Sorry, but the Flexcars are significantly less attractive. It looks like their marketing department went out for a drive and had a fender-bender with their new logo).

Like public transportation, the economics of car-sharing only make sense with high urban density. In fact, car-sharing is a substitute for other transportation options, many of which are better for the environment. When asked what people would do if a shared car were not available, nearly half of respondents said that they would have taken public transportation or not made the trip at all. It appears that half the time shared cars are used, they have the potential to increase traffic.

This is balanced by another effect of car-sharing: People are more aware of how much they drive. If a user factors in the cost of a Flexcar for a quick trip to the grocery store, the price of a gallon of milk could soar from $3 to more than $10. And that suits the car-sharing business model. Flexcar and Zipcar need high usage rates to remain profitable. But forty members sharing a single car means that each week, a member can only reserve a car for an average of 4 hours. If a member wants a car during premium hours after work or on the weekend, car-share members had better plan ahead: members have an average of about 1 premium hour per week.

Getting Suburbanites Out of Private Vehicles and Into Shared Cars

Although urban car-share members may drive more, suburban users help account for the 46% of drivers who reported that they drove less after they started using car-sharing. Although the FTA report concluded that, “many studies show no statistically significant change (in vehicle miles traveled),” car sharing helps fill a mobility gap created by insufficient public transit in the car-centric suburbs. Suburban two-car households can significantly reduce their expenses by switching to one car plus what Zipcar calls a “fractional second car.” And this may help reduce vehicle miles driven (VMT). Arlington, a northern Virginia suburb of DC, reported that the average car-share member reduced their VMT by 43% between 2005 and 2006.

For now, shared cars are focused on the more densely populated areas with populations that are inherently less reliant on car culture. Flexcar and Zipcar have about 75% of their total fleet in the District of Columbia despite the fact our 515,000 residents make up only 10% of the total DC metro population. Even in close-in suburbs like Arlington, 83% of the 3,500 car share members live in the densely populated Metrorail corridor.

Car Sharing Eases Parking Pressure

Densely populated areas stand to gain the most from car-sharing for a reason that may not be immediately obvious: parking pressure. Despite what urban dwellers may believe, even un-metered street parking is not free. Street parking is public land where private citizens are allowed to store their vehicles. Any taxpayer without a car is effectively subsidizing vehicle owners. All parking spaces have an opportunity cost. That is, there is the opportunity to use that space for something else that is forfeited when we park our cars on the street.

Convenient parking also reinforces America’s car culture. Albuquerque, New Mexico, for example, devotes more land to parking than to all other land uses in the city combined. According to Donald Shoup, the author of The High Cost of Free Parking, 15% of parking spaces must be open at all times or people will be dissuaded from driving. Car share minimizes this problem for neighborhood street parking because its parking spaces are permanently reserved. This means less time, and less traffic, caused by people driving around looking for a spot near home.

How Shared Cars Can Create Bike Lanes

Eliminating the need for free street parking is indeed a worthy goal. Anyone experienced with urban biking has had nightmares about a driver’s door whipping open in front of them. Bike lanes alleviate some risk by granting a wider berth to cars parked curbside, but according to WashCycle, U.S. cities often build bike lanes too close to parked cars. Michael King at University of North Carolina-Chapel Hill advocates at least 14′ from the curb to the edge of the bike lane, but this guideline is ignored by many U.S. cities. This may explain why many cyclists refer to bike lanes as “suicide lanes.”

So what would happen if U.S. cities accepted shared car culture as the norm? Statastic used a Northeast Capitol Hill neighborhood as an informal case study to find out. Assuming that the neighborhood has the same average density as the rest of DC, there are about 4,000 people living in an area about 6 long and 11 blocks wide.

Now for the assumptions. According to census data, about 18% of DC residents drive by themselves to work. We’ll let them keep their cars. Another 28% are car owners who either carpool or don’t drive to work. We’ve decided that one-third of them will be converted to car sharing and will give up their cars. The remaining 32% of DC residents over age 18 don’t have a car, so let’s assume that 100% of them become car share members. The result is that 1,600 of 4,000 residents in this neighborhood are now full-time car share members.

Using the Zipcar ratio of 40 members per car, the neighborhood will need an additional 33 shared cars, bringing the total to 40. Zipcar claims that each shared car replaces 15 to 20 private vehicles, and that means more available street parking. Those 40 shared cars in northeast DC could replace 800 private cars, freeing up twelve miles of street parking. Eliminating street parking on one side of a 44′ wide road would also liberate about 16% of the pavement. Wider bike lanes could be added, existing traffic lanes could be widened, and wider lane for street parking would eliminate risk of getting doored while biking by.

The best part is that by increasing the density of shared cars, there would likely be a tipping point where it would become increasingly popular. As people convert to shared cars, the distance between the average resident and a shared car shrinks. Another way to look at it is that with a high conversion rate, the number of cars within three blocks of any resident would increase from 2 to 15. That means more cars to choose from: hybrids for quick city trips, trucks for hauling, or a convertible Mini for a weekend away.

How could we get to this tipping point? Taxing the free parking along city streets would be a start. To give an idea of how valuable the land is that DC residents park their cars on, consider that the going rate for a private parking spot is about $200 in the Dupont area of DC. Taxing street parking could be done in conjunction with proportionally lowered property taxes to avoid political backlash from homeowners. Although cities won’t necessarily generate more income from street parking taxes, residents would understand the real cost of parking and could make a rational economic decision about car ownership.

Shared cars and biking everywhere. Does the car-free life sound like a pain? It’s easy to get used to - Statastico does it every day.