Tuesday, April 19, 2011

Suddenly It's Real

I've long believed people largely underestimate the marginal costs of driving, as most costs are perceived as being fixed. You buy a car, buy insurance, and then you put gas in the tank and that's the only perceived marginal cost. And even that isn't perceived correctly, as you buy gas (generally) a tank at a time and there isn't a perfect perception of how much each mile actually costs you. How many people have actually done the calculation of, "my 30 mile round trip daily commute costs me $X?" But in reality more driving=more depreciation=more maintenance, and a chunk of your insurance bill should be more closely tied to how much you actually drive. Also, too, free parking. I'm not saying driving should cost more, I'm saying it would be better if people had a better perception of the actual cost per mile.

And, at $5/gallon in a 20mpg car, that round trip commute will cost you $7.50

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