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Comment by jltsiren | Hacker News Reader

Widely used public transportation is usually a sign of an efficient and well-developed economy.

When the economy is poorly developed, people have to do many things on their own, because comparable services are not available on the market for a reasonable price. A more developed economy enables a higher level of specialization. When people can buy the services they need from someone else, they can spend their time and money on higher-value activities.

The right comparison is not public transportation vs. private car, but driving your own vehicle vs. buying transportation as a service. The latter can include anything from city buses to chartered jets.

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When people get rich they spend more money on private cars and less money on public transportation.

America got rich, people bought cars. That's the way it went down.

Also, the US explicitly designed new development around the idea of people owning cars. Public transportation is kind of a moot point when you just have tracts of housing completely separate from commercial areas.

All you have to do is visit Seoul or Tokyo to see how valuable and useful public transportation is, when it's done correctly and city planning takes it into account. Even if one is rich, actually driving and parking is a complete hassle most of the time in cities. It's so much more convenient to take a bus or train.

When you go from thousandaire to millionaire to billionare, your spending on busses or trains goes down. That's an inferior good.

I don't really understand why you're fixated on this one particular viewpoint. That statement does not look at -context-.

Cities are not designed around the rich or the ultra-rich. Transportation systems are not designed around the rich or the ultra-rich. If all of us had infinite money we would just use private jets or something, but that doesn't mean that jets are strictly superior to cars... this is an apples to oranges comparison.

As someone who's lived in Chicago, Seoul, and South Carolina, I can say that our public transportation systems are wholly inferior to Korea and Japan's public transportation systems. It's not strictly a matter of money or not, it's a multifaceted cultural topic.

The whole idea of ranking transportation systems by what rich people do or don't do makes absolutely zero sense.

"If all of us had infinite money we would just use private jets or something, but that doesn't mean that jets are strictly superior to cars"

That would mean cars were an inferior good over that income range.

Then you need to quantify your statement.

-> _For the ultra-rich_, trains and other public transportation are inferior options.

This is completely different from saying that public transportation is an inferior good overall. It's not that simple.

If your income goes up and you spend less on something, that's an inferior good. That's pretty much the definition of an inferior good.

Yes, in economics this is called an inferior good. This does not make public transportation a bad investment or mean that society wouldn’t be better off overall with it. We are local optimization machines and sometimes our desires are not overall beneficial to us. It is an inferior good as that phrase is used in economics but it is the right choice. Economics primarily deals with desire and ‘utility’ functions. It does not provide insight into what is best for society as a whole. Particularly since in our system negative externalities are not built into price.

>> We are local optimization machines and sometimes our desires are not overall beneficial to us.

Who decides what is beneficial for me in your opinion, me, you or the government?

Sometimes government, sometimes the individual. It’s a balancing act. My neighbor might think it’s in his best interest to dump toxic waste on his property because he needs/wants money. In this case, thankfully, government is there to look out for the benefit of society as a whole.

Classification of a good as inferior in economics is not a judgment about that particular good, it's just a historical observation about a particular income-demand curve. Let's just quote the Wikipedia article:

> Inferiority, in this sense, is an observable fact relating to affordability rather than a statement about the quality of the good. As a rule, these goods are affordable and adequately fulfill their purpose, but as more costly substitutes that offer more pleasure (or at least variety) become available, the use of the inferior goods diminishes. Direct relations can thus be drawn from inferior goods to socio-economic class. Those with constricted incomes tend to prefer inferior goods for the reason of the aforementioned observable inferiority.

Many of these goods are eschewed by the rich due to cultural / status phenomena that are constructed artificially by people trying to sell so-called luxury goods.

In the context of how to plan our cities, this has little bearing on the discussion. Should we use mechanical clocks to keep time because when people get rich they're more likely to buy watches with mechanical movements? Certainly those have emerged as a status symbol, but that's entirely constructed and could be otherwise. It's not based on any inherent superiority.

>> In the context of how to plan our cities, this has little bearing on the discussion.

I'm not sure where you get that. If public transportation is an inferior good, then to the extent we need people planning our cities those planners need to take into account that the demand for public transportation will decrease as people get wealthier.

Rich people don't ride the bus. Maybe that's OK?

You're confusing absolute and relative wealth. Sure, wealthier people in a particular metro area may be less likely to take transit than less wealthy people in that metro area. Plenty of wealthy people move to dense urban areas from car dependent suburbs and then stop driving as much.

> Rich people don't ride the bus. Maybe that's OK?

It's not practical to have a dense urban environment where everyone drives everywhere, because cars and car infrastructure take up an incredible amount of physical space. So if people want to live in those areas (and clearly many people do - they're willing to pay a premium for it), then a good percentage of people in those areas need to walk, bike, or take mass transit. If they don't, the city will shut down due to gridlock and nobody will get anywhere.

>> Plenty of wealthy people move to dense urban areas from car dependent suburbs and then stop driving as much.

And when they move there, the wealthier they are, the less likelier they are to use public transportation. Because public transportation is an inferior good.

>> (and clearly many people do - they're willing to pay a premium for it)

Not true, high density housing costs more per square foot than single family detached and sells at a discount to it. People are willing to pay a premium for single family detached housing.

You're being deliberately obtuse. People are willing to pay a premium for more space in the same dense metro area. Why are there condos worth $2MM in SF when you can buy a house in central PA for $40,000? It's because people want to live in dense urban areas with other people. Those dense urban areas are simply not workable with everyone driving everywhere. It wouldn't matter if everyone's a billionaire, you can't have a dense urban core with everyone driving. Those dense urban areas are the most expensive real estate markets in the country.

Which goes for more, the condo in SF or the single detached home in SF?

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