Wise Money Decisions

There is an interesting clip from “reason.tv” on the frontpage of the Utah Taxpayers website.  Drew Carey proposes a private market solution to the public problem of heavy traffic in Los Angeles. 

Mr. Carey would like to see private companies build roads that would, in essence, compete with public roads.  Drivers could choose whether to take the public road for free and run the risk of heavy traffic, or take the private road without heavy traffic.  The private roads would make money through tolls.  No taxpayer dollars would be used. 

Here are my thoughts after watching the video.

On the one hand free roads are nice because they’re, well, free. On the other hand there are long wait times because everybody else wants to use them too.

Roads are no different than any other service. When there is no marginal cost imposed on the user, they get used beyond capacity.  The result is long wait times. With roads, we call it “traffic.”  With healthcare, we call it “Dr. Johnson has no appointments available until next June.”  It also happens with internet bandwidth.

It makes me wonder what it would be like if roads were privately owned and operated. What would we think?  We would complain at the nickel and diming as we drive down the freeway each day. It would be easy to think, “If only we had government-run roads, we wouldn’t have to pay all these tolls. Driving would be free. What a great world it would be.”

Well, we have that world, and it’s filled with gridlock and long commutes.

It’s also interesting to see the technological solution on the private road on highway 91 in Orange County.  There’s a scanner that tracks the vehicles that drive through the private road.  Depending on the time of day and the amount of traffic, the amount of the toll goes up and down, ranging anywhere from $1.50 to nearly $10.  The average toll is about $2.75 according to the video. 

What kind of people choose to pay the toll?   People that believe the time they save is worth more than the toll.  Each person makes the choice for himself/herself.

Are there lessons to be learned from the way we do roads that apply to other services? 

Take healthcare.   There is no shortage of people who think their lives would be better if we move to a government-run healthcare system.  Some of them are right.  Some people would benefit.  It would be free or very lost cost.  Everyone could go to the hospital anytime they need, for any reason.  What’s not to like?

Just make sure you book your flu vaccination appointment in April.  It may take 6 months to get in.

Today I introduce a new feature called “PFAIRQWOBRAR.”  

As you might have guessed, PFAIRQWOBRAR stands for “personal-finance and investing related quotes worthy of being repeated and remembered.” 

Some are funny.  Some are insightful.  A few are both.

PFAIRQWOBRAR Quote #1:

“Credit cards are like buzz saws. They are useful tools but dangerous if in the hands of someone who doesn’t use them properly.”

– courtesy of Consumerism Commentary

Jail is my worst enemy at times, and at times my best friend.  It depends on how many hotels there are.

I came across this statistical analysis of Monopoly by Truman Collins, who as far as I can tell is an electrical engineer in Oregon. 

It has the distinction of being the most complete statistical analysis of Monopoly I’ve ever seen, and the only statistical analysis of Monopoly I’ve ever seen.

I have neither the time nor inclination to check Truman’s model.   But assuming it’s right, it claims to determine the most likely square to end your turn on (slightly different than the most likely square to land on).  I believe there are 40 squares on a Monopoly board, so the average likelihood for each square should be 2.5%.

It may not come as a surprise that Jail is the most likely square to end a turn.  You can end a turn in Jail by landing on Go To Jail, rolling three doubles, getting a Chance or Community Chest, or by starting the turn in Jail and not getting out. 

After Jail, what is the next most likely square to end your turn on?  I would not have guessed:  Illinois Avenue.

And the least likely square?  It’s a trick question.  Since it’s least likely to end on, rather than land on, Go To Jail is the least likely since it’s impossible to end a turn there. 

The three next least likely squares are Chance, followed by the first Community Chest (between Mediterranean and Baltic).   Why?  Because many Chance and Community Chest cards send you to another square.  Interestingly, the other Community Chests are substantially more likely than the first one.   Not sure why that would be.

After Go To Jail and the card squares, the least likely square is ….. (drum roll) ….. Mediterranean Avenue.

There you go, more statistics than you ever wanted to know about Monopoly.   Unless you’re a statistics geek like me, in which case I predict you will check out the analysis yourself.

P.S.  My deepest apologies for ending a few sentences with a preposition.  I don’t prefer it, but it’s the vernacular.