Question

Everyday commute in Mumbai and Bogota has become a hassle for the citizens of the city. Propose solutions to ease the traffic in the city. Use ALL of your knowledge of transport economics and rest all your proposals on economic and technical analysis.

1.    The main purpose is to have happier citizens.

2.    List all the problems connected to increased traffic in the city. (incl. commute time, costs, wider roads, smaller living spaces, psychological, health,…)

3.    Propose solutions (incl, charging entering districts, lower fare / free public transport, promoting bicycles and other personal transports, more public transport availability, luxury services, charge cars by their sizes / promote smaller cars, personnel services?)

4.    Make an economic analysis of the methods you propose. Try to calculate what the benefits are (in terms of utility), calculate the cost and compare costs and benefits.

5.    Decide which solutions to employ.

Min 1500 words are required

Answer 1

The economics is all about the efficient allocation of the resources because the optimal use of resources increases the welfare of the society. The waves of globalization have interconnected the world and allowed the firms to cut the cost by moving to cheaper locations. That means the world has more output at lower cost. The increased wealth in the last couple of decades in emerging economies means there is a higher demand for consumption. That includes the automobile also. The car is considered as a status symbol and its ownership has risen to manifolds in the recent times. However, the infrastructure such as roads could not match the pace in those emerging countries and especially in low or middle income countries. The cities with a high population density are facing serious problems because of clogged roads, traffic jams, pollution and waste of resources such as fuel and time.

City of Mumbai is very densely populated which leaves a very little scope for widening of roads. On the other hand, Bogota is considered as the worst city for traffic congestions. The important problem here is lack of efficient public transport system. Mumbai has a good network of local trains and buses but it unable to cater the huge population and far from comfortable. Bogota also has public transport system but current situation indicates that it hasn't been successful because of over competition.

The economic theory suggests that the human beings respond to incentives. The government will have to spend on the infrastructure to develop metro trains on the longer route while the shorter routes should be serviced by buses or trams. We will have to take into account the population density, demand and frequency here. If the demand is higher in only morning and evening then it will not be feasible to have trains which will run empty in the meantime.
If the city is small geographically like Mumbai then it should choose trams over trains.
Similarly, the charge per travel should be minimum so that it will incentivize the common people to opt for public transport. The statistical methods could be used to forecast the peak hour time and so the options should be implemented.
In addition to that the authorities should tax ownership of the vehicle heavily and should also charge for parking on the roads.

These are some methods whichcould to alleviate the problem.