Think on the Margins

If my training in economics taught me anything, it’s to think on the margins. How much extra do you get for a little bit more? The revamping of the Eurostar, the high-speed train that links the UK with the continent, is a good example of not thinking marginally. For about $12 billion, they built a new station and new tracks in the UK, to save 25 to 30 minutes. That’s $480 million for each minute saved, is that a good investment? For any investment like this, one has to think on the margins. How much will it improve travel time versus what is already available, is the marginal improvement worth the money? Applied to the US context, does an investment in high-speed rail make sense if it only marginally improves travel time when the alternative (air) is already very viable?

Ben Dachis is a policy analyst at Reason Foundation, a nonprofit think tank advancing free minds and free markets. His research involves aviation, airport, urban land use and transportation economics and privatization.