Wednesday, July 17, 2019

Mobile River Bridge Plan is Fatally Flawed: Reason 13

I submitted an independent review of the Supplemental Draft Environmental Impact Statement (SDEIS) to the Alabama Department of Transportation (ALDOT) on July 10, 2019. As of this writing, ALDOT has not acknowledged receipt of my report, containing 19 specific issues with the project's decision document. The SDEIS is the most important document pertaining to the project. The bridge and bayway replacement cannot go forward without it.

The document is fatally flawed.

Since ALDOT has neither publicly nor even privately acknowledged that they are aware of these 19 specific problems with their decision document, I am sharing them with you, one at a time.

Note: Comments 12-19 are all about the Traffic & Revenue Study, which is the key to how the toll structure was developed. This is Economics 205 level stuff.

Comment 13: Ability to pay is not factored into the value estimates underlying the proposed toll.

Basis: Ability to pay is a driving factor in any successful transaction in a market economy. One must be both willing and able to pay for any product or service. Any analysis of willingness to pay that does not recognize the consumer’s budget constraints will always and everywhere artificially inflate the value of the subject good or service.

As an illustration, consider the homebuyer thinking of a landlocked vs a waterfront dwelling. The waterfront house is certainly more desirable than the same house located inland. But only a limited number of homebuyers can afford the additional costs of the waterfront property. The T&R Study does not account for budget constraints and thus would estimate value as if everyone can afford to live on the beach, lagoon, bay or river.

Our free market economy is full of examples where transactions do not occur even when producers have efficiently priced goods and consumers have the willingness to pay but lack the financial means to complete the purchase.

The only thing that this study does is estimate how much appreciation the window shopper has for the dress or suit just inside the clothing store. This is unrealistic, further rendering the study’s trip value estimate useless.

Without resolution, this issue could halt finalization of the SDEIS.


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