A cost-benefit analysis of high-speed rail
Matt Yglesias points us to this survey of costs and benefits from a Dallas-Houston high-speed rail link. I'm not convinced by many of the particulars of the argument, which claims to show that the link is a good idea. For instance will the train line really be built with green energy? Will 80 percent of flyers take the train? Is Madrid-Barcelona a good analogy?
More generally, my jaw dropped when I read the denouement:
In this more comprehensive model that takes into account trivialities like regional population growth and a reality-based route, the annual benefits total $840 million compared with construction and maintenance costs of $810 million.
I'm not sure what discount rates he is using but even if we put that problem aside this screams out: don't do it. Given irreversible investment, lock-in effects, and required hurdle rates of return, this still falls into the "no" category. And that's an estimate from an advocate writing a polemic on behalf of the idea. I'm not even considering the likelihood of inflation on the cost side or the public choice problems with getting a good rather than a bad version of the project. How well has the Northeast corridor been run?
So, on high-speed rail, count me as still unconvinced. Nonetheless if you know of a good cost-benefit study, of a single rail link, not in the Northeast corridor, favoring HSR, let me know in the comments. I'll try to read and report on it.
General remark: It's not about population density per se. It's about how many independent, hard-to-connect nodes the system has and that is why high-speed rail on the whole works better in Europe or Japan than in many other locales. To give an example from a slightly different realm, I live right near the Metro in a high-density suburban area. Yet I don't take the Metro to my Arlington office, which is about two minutes from a Metro stop. I'd rather do the 37-minute drive. Why? Because I stop at the supermarket and the public library on my way home at least half of the time or maybe I stop to eat at Thai Thai. If those conveniences were right next to my house I'd consider the Metro but they're not. The fact that my neighborhood has lots of people doesn't help me any. In Tokyo you could live for years within the confines of many (most?) individual city blocks.