Update and Sensitivity Analysis

First, an update to yesterday’s post. I made the mistake of making insurance costs monthly rather than annual in several of the scenarios. Here’s what that looks like without changing any other variables:


The savings bump up, at best a middle class suburban family with short suburban commutes still pays about $1,500 more a year than an equivalent urban family with urban commutes with one car. A lower income family saves nearly $3,000 a year if they can ditch the second car. I should note that a suburban family who can ditch a second car and have both working adults bike/walk to work but isn’t burdened by transit, parking, or Car2Go costs would save over $4,000 a year. Find me a family of four making $50k (pre-tax) who wouldn’t kill for that cash.

Now, for some sensitivity analysis. I purposely picked a low gas price at $2.50/gal, which we haven’t really had consistently in the recent past and probably shouldn’t expect to looking forward. I also picked fairly low commute mileage for suburban folks. The idea that abundant, cheap (single family detached) housing can be had out on the urban fringe means longer commutes than 10-12 miles. Let’s say a suburb-to-downtown commute is more like 20 miles and a suburb-to-suburb commute is more like 17. Neither of these are particularly crazy scenarios.


An urban middle class family now saves $1,800 a year compared to a full-on suburban one, nearly $4,000 a year compared to a suburban family with one downtown worker, and a lower-income family makes it to $4,000/year savings without even ditching transit or car share. Now, if gas were to jump back up to $4 per gallon (via market pricing and/or a hike in the gas tax to cover a fraction of societal costs borne by driving, yet still well below our European first-world country peer gas prices):


Again, savings are more pronounced. If anything, this is simply an argument that living in a walkable, bikeable area with decent transit is a great way to insulate yourself from energy price swings. When gas is cheap, a one-car household can drive every now and again at little penalty. If gas prices rise, just hop on the bike or bus.

We also see how much gas prices and long driving distances really hurt low income families here. A family making around $50,000 a year and living out in a third or fourth ring suburb spends over 20% of their pre-tax income on transportation if they drive 15-20 miles per working adult. Yikes. This is a problem. As I said in the last post, if we want to encourage suburban living for lower income families to access better schools and jobs, we damn well better allow them to live close to their jobs, build sidewalks and bike infrastructure, and maybe even run some halfway decent local transit lines.

None of this is earth-shattering math. I’m just a little sick of the both sides of the transportation cost argument, the truth is somewhere in the middle.

2 thoughts on “Update and Sensitivity Analysis

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