Loss aversion is the critical barrier to acceptance of
mileage-based user fees or VMT charging. Well known to behavioral economists,
loss aversion says humans experience losses at about 2.5 times more intensity
than an equivalent gain. Losing ten dollars feels as bad as winning 25 dollars
feels good. Coupled with an exaggerated tendency to fear losses that
incorporate uncertainty, loss aversion, is built deeply into the human psyche
with roots extending far back in evolutionary time, preserving gene pools. Loss
aversion cannot be ignored by transportation economists who wish to see a shift
to paying for roads according to use.
Motorists’
perceived losses associated with road use charging include a wide variety of uncertain effects: additional taxation,
privacy invasion, comparative inconvenience, reduced autonomy of movement,
government spending misallocation, inequity for one group or another, etc. That
the degree of these presumed effects is uncertain—each can, in fact, be readily
avoided—merely adds to the weight of loss perception.
Our
explanations of counterbalancing gains also weigh far less than we imagine due
to their uncertainty and imperceivability. The potential repeal of fuel duties,
congestion abatement, improved environment, and better transit—if
believed—weigh little to drivers who feel at risk for larger personal losses.
Abundant uncertainty further exaggerates the 2.5-factor spread between the loss
of the status-quo and the tenuous gains of road user charging.
The way automobility and its taxation has evolved to now
precludes a reasoned switch from fuel tax to road-use tax. We need to think
about a very different route to the change we seek, and DC Councilmember MaryM. Cheh has just shown us one.
In September 2012, Cheh introduced a bill in DC Council
“[t]o authorize autonomous vehicles to operate on the roadways of the
District”, provided that the vehicle “[o]perates on alternative fuels,” and
that, “[o]wners of autonomous vehicles pay a
vehicle-miles travelled (VMT) fee of 1.875 cents per mile” and that [t]he VMT
fee shall be tabulated using an autonomous vehicle’s telemetry systems.”
Cheh’s proposal shows us a way out of the loss aversion
problem. If you think about the AV of a few years from now, you can imagine it
changing a lot of things. Besides the effects related to road safety,
congestion, and fuel consumption, it will have dramatic effects on public
transportation, shared vehicles and private vehicle ownership.
And the Jevons Paradox, which says that when
we use a resource more efficiently, we consume more of it—in this case, road
space—suggests that we would likely experience an increase in vehicle miles
traveled. Hence, Jevons predicts that a new efficiency given us by the AV would
tend to keep congestion and fuel use—and the need for road funding—running
high.
AVs can sufficiently alter the evolution of
automobility to change the perception of gains and losses between fuel taxation
and VMT charging. Councilmember Cheh is right to take advantage of
the switch to the AV to switch tax regimes at the same time.
