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Tradeoffs, Self-Insurance, and Externalities:

A common refrain in response to the hurricane situation and the interruption in gas supplies that it has occasioned is the argument that this demonstrates the need to reduce our reliance on oil and gasoline, including providing incentives to get people out of their SUVs (I own one) and into smaller cars. It is argued that there are all these externalities associated with SUVs, such as pollution, lower gas mileage, etc. So, it is argued, we just want those SUV guys (I own a Pathfinder) to internalize their externalities. Policy conclusion: We should get rid of all the SUVs, right?

But then I heard historian Douglas Brinkley on Bill O'Reilly describing about his escape with his family from New Orleans after the hurricane. O'Reilly asked him to describe how he got out. I haven't been able to locate the transcript, so I'm going from memory, but his answer went something like this. "Luckily I own an SUV. So I was able to drive through the flooded streets and go up over curbs and road medians in order to avoid downed trees and power lines. After weaving through town, I finally got out to the highway and then drove straight to Houston." Now I haven't seen any data on this, but I am willing to bet that people who owned SUVs were much more likely to be able to escape New Orleans after the hurricane than those who owned hybrids (we know of at least net one family who wouldn't have been able to escape--Brinkley's). And, by self-insuring their ability to get out of the crisis zone, this of course reduced the number of people who have needed to be tended to in New Orleans, leaving more supplies for those who couldn't get out. More SUVs, it follows, equals more people able to exit the city. So the externality is actually created by those who could afford to purchase an SUV, but instead choose to indulge their pro-environment tastes not to, thereby relying on taxpayers and other victims to subsidize their decision. Policy conclusion: We should mandate that every American household purchase an SUV which they can use in the event of an emergency.

The point is more general. Every time it snows, I can get around in my SUV (that's one of the many reasons we bought an SUV in our family). Those hybrid drivers out there, by contrast, can't move until the streets get plowed. Yet the snow plows are paid for my tax dollars as well as theirs. Again, whereas I have self-insured against snow and internalized my costs of getting to work, the hybrid driver has again decided to externalize the costs of his choice by forcing me to pay for the snow plows that he needs and I don't. Again, policy conclusion: Mandate that every household own an SUV.

Of course, the real point is that there are tradeoffs to every policy. An energy policy that reduces SUV ownership will reduce energy consumption and pollution, but it also means that fewer people like Professor Brinkley and his family will be able to self-insure against a disaster like the hurricane and instead will be trapped in the city, participating in the horrible misery, and relying on taxpayers and others to help them.

Either way, there are externalities and subsidies. If we only examine some of the externalities and subsidies in isolation, we will be led to to a terribly incomplete understanding of the full policy consequences. One might say that the eventualities under which SUVs will really be beneficial are sufficiently rare that they are offset by the costs. Or one could say that even if the likelihood of the risk is small, the benefit of enabling many Brinkley families to be able to save themselves is sufficiently high that we are willing to allow them to make that choice. Or one could say that in general we prefer self-insurance to social insurance, in that social insurance creates too many moral hazard and adverse selection problems, like people buying small cars and then relying on tax payers to bail them out when it snows.

These are difficult tradeoffs to think about and I can't see that there is any obvious way to measure them in any meaningful sense, which requires us to fall back to a large extent on our intutions, which inevitably are going to differ from person to person. My personal priors are that I have a hard time saying that we should prohibit Brinkley from making the choice to buy an SUV, or heavily subsidize those who want to indulge their preferences for the environment at others' expense. But it is quite evident as well that many, many others disagree with me on this and would weigh the tradeoffs otherwise. But most importantly, we must recognize that those tradeoffs will, and must be weighed.

theophylact:
Right. And the poor, who couldn't afford cars to escape New Orleans, would have ever so much better off by not being able to afford SUVs. And the gasoline that they couldn't have afforded for their nonexistent cars would have been so much cheaper if everyone like you owned a fuel hog, because of course increased demand automatically lowers prices -- doesn't it?

Really, the smug self-satisfaction of the upper-middle classes in the face of other people's tragedies is almost too much to bear.
9.6.2005 3:07pm
B. B. (mail):
Um, if you're a person who is that worried about snow, etc and being able to get around and feel you absolutely must have an SUV, there are multiple hybrid SUVs already on the market. If you have the money to buy an SUV, you almost certainly have the money to buy a hybrid SUV. Nice try rationalizing your gas consumption though.
9.6.2005 3:17pm
Donny (mail):
Years ago I had a teeny-weeny Honda Civic that was absolutely amazing in New England snow. The SUV advantage in that regard is completely overrated.
9.6.2005 3:20pm
Devin McCullen (mail):
You can't draw conclusions from isolated incidents, but if Brinkley was smart enough to buy an SUV, why wasn't he smart enough to evacuate the city before the hurricane hit?
9.6.2005 3:28pm
Observer (mail):
I wonder how many people who buy hybrids and pat themselves on the back for being oh so environmentally conscious also live in 3,000 square foot houses (or bigger) and burn copious amounts of oil and natural gas heating them? Just wondering.

I love my little convertible, but I'm awfully glad my wife and family are driving around in an "urban assault vehicle" - if you want to drive in an econo-death trap, go right ahead, just don't preach to me about it like you're some kind of superior being.
9.6.2005 3:34pm
bill-10k (mail) (www):
My friends of 40 years had a small car, they got hit on a city street a few months back, neither is expected to recover for at least a year, probably two. The wife broke both legs and her hip, the husband(a lawyer BTW) damaged his back so bad he can barely stand with crutches. She is expected to be bed ridden for at least a year. All airbags deployed, cops said they were lucky to have lived. The other guy was driving a Lincoln sedan, he had no injuries.

They used to brag about getting 35 mpg.

They were lucky they weren't hit by a truck.

Flat little cars aren't for me. I drive an F-350 diesel 4x4.
9.6.2005 3:35pm
cfw (mail):
I see your implicit point that one should let the market dictate best conservation measures - let the gas price gradually go to $6, as in Holland. Then you might learn to put chains on a car or van that can get 30 mpg when it snows.

Better practical mobility of the SUV over minivan or car is pretty theoretical, in my view. I own a 30 mpg SUV (RAV4)(used by daughter away at school), high mpg toyota car, and a mini van (Honda Odyssey) which I expect is at 27 mpg with a clean air filter.

Mini van did fine in rough terrain around Monument Valley.
Chains make the mini van fully mobile in snow country, comparable to an SUV.

SUV faces a roll-over risk if using the slighly higher ground clearance. Coming out of NO, I would have opted to take the minivan, to carry 7 persons and/or files, computer, luggage, etc.
9.6.2005 3:35pm
Hugh59 (mail):
Well, I love all wheel drive but I hate the lousy gas mileage of SUVs. So, I have two AWD cars: a 1988 Toyota Camry AllTrac and a 1999 Audi A4 Quattro. Neither car has the ground clearance of an SUV (and I would never risk the Audi in bad weather or dangerous conditions). But the Toyota does fine in snow or mud (as long as I stay on the road).

Indeed, I think most SUVs would probably be useless of the road because of the road friendly tires mounted on them. But I could be wrong. Still, I have good mileage and AWD. Subaru owners can get most of the benefits of an SUV and decent mileage with the Forester Outback wagons (and they are supposedly less likely to rollover and are very safe against impacts).

So, there ARE choices for people who want the mobility of an SUV but don't want to pay the price (initial and gasoline) for a Chevi Suburban Subdivision.
9.6.2005 3:41pm
David M. Nieporent (www):
Really, the smug self-satisfaction of the upper-middle classes in the face of other people's tragedies is almost too much to bear.

Whereas the smug self-satisfaction of the limousine liberals who think they know what's best for everyone -- including poor people they'd run away from if they ever saw -- is perfectly reasonable, right? Did you even read Todd's post? "Of course, the real point is that there are tradeoffs to every policy."

-----

If you have the money to buy an SUV, you almost certainly have the money to buy a hybrid SUV.

I don't quite the logic of saying that if one can afford $20,000 for a car -- which is what a small SUV such as a CRV, RAV4, or the like goes for -- one can afford $30,000 -- which is what a Hybrid SUV goes for. Which is not to say that all SUVs are that cheap, of course. But you seem to fail to distinguish. Which is the same problem the previous commenter displays: the failure to understand that one size does not fit all.
9.6.2005 3:46pm
Aultimer:
The SUV tar brush paints far too broad a swath of vehicles. The stereotypical "bad SUV" carries 5 passengers and gets 12 MPG (Explorer V8, Hummer). There are plenty of "good SUVs" that carry many people through difficult conditions and get reasonable mileage with lower (LEV, ULEV) emissions (Honda Pilot, Toyota Highlander). The snow argument is bunk - any modern car with ABS and traction control is up to the task of driving on a "hard" road.
9.6.2005 3:47pm
AppSocRes (mail):
Slightly off-topic, but one of Bernard Goldberg's 100 people who are screwing up America is Laurie David who's bete noir is SUVs and who makes a habit of publicly haranguing their owners and drivers as obnoxiously and frequently as possible. Thing is, Ms. David has a problem rubbing elbows with hoi poloi either in economy, business, or first class. So when she makes her twenty or thirty annual trips from left-coast to east coast and back she does it in a private Gulfstream jet. Each round trip consumes about twice the fuel the average Hummer does in a year.
9.6.2005 4:02pm
MarkW (mail):
Years ago I had a teeny-weeny Honda Civic that was absolutely amazing in New England snow. The SUV advantage in that regard is completely overrated.

I drive a Honda Civic up here in Spokane, WA, and have never had any difficulty getting around during winter.

As for the "externality" involving plowing streets--streets would need to be plowed to ensure the mobility of emergency vehicles, etc, regardless of how many people owned SUV's.
9.6.2005 4:06pm
sprice (mail):
There are many good reasons to own and drive an SUV light truck but I suspect what gets most resonable people upset is seeing these vehicles used by single occupant commuters. I feel it is fair to say your choice of vehicle is wasteful if for 95% of its life it has a single occupant and rides on city streets and highways. If your driving habits require the performance of a car why do you get a pass on emmisions and fuel economy on a "utility" vehicle?

Unfortunatly this valid concern has turned into a peevish attitude for many drivers who call for SUV bans.
9.6.2005 4:09pm
anonymous coward:
Perhaps an example is ill-chosen when it dominates the discussion over the point it attempts to illustrate.
9.6.2005 4:36pm
Bus rider:
We have an SUV, but it's our only vehicle, and I ride the bus to work. So how do I do on the Eco-moral scale? And can I get a bumper sticker that says "my other car is the bus," so that The Looks of Judgment (TM) will soften?

Thankfully, my voting habits have already disqualified me from Superior Moral Status (TM), so I need not worry.
9.6.2005 4:46pm
Goober (mail):
It is argued that there are all these externalities associated with SUVs, such as pollution, lower gas mileage, etc. So, it is argued, we just want those SUV guys (I own a Pathfinder) to internalize their externalities. Policy conclusion: We should get rid of all the SUVs, right?

Right? No, wrong. In fact, really obviously wrong.

1) Lower gas mileage isn't an externality, as a minor quibble.
2) The "policy conclusion" to SUV drivers not responding to their cars' externalities isn't to prohibit SUVs; it's to impose a tax or some other mechanism that internalizes those externalities.

If the cost of gas were increased by means of a tax approximately equal to the social harm of pollution, subsidizing the al Saud family, etc., we would expect the decision to drive an SUV or a hybrid to approximate the socially optimal level. That's the whole point; you don't subsidize the purchase of SUVs by means of artificially cheap gasoline. Would we expect no one to buy SUVs in such case, or would we expect consumers to ignore the benefits of SUVs you mentioned above? No; obviously most customers will consider the utility of SUVs when there's snow on the ground, etc. They'll just compare them against the true cost of higher gasoline consumption.

So, nicely done, you've demolished the argument "that we should prohibit Brinkley from making the choice to buy an SUV." But now someone has to sweep up all that straw.
9.6.2005 4:50pm
Slocum (mail):
Your example sounds to me more a demonstration of the moral hazard of SUV ownership -- that is, ANYBODY could have driven out of New Orleans in any type of vehicle BEFORE the storm. The SUV owner, though, apparently thought his vehicle was invincible and stayed long enough that he HAD to try to maneuver around flooded streets, downed power lines, etc. Only by good fortune was he able to fend for himself as opposed to ending needing rescue.

I see this behavior all the time in snow storms--SUV owners driving like maniacs. Every time one flies by in the left lane, I think, "Earth to moron -- your SUV doesn't improve your visibility in blowing snow or your ability to turn and stop. The only thing the 4WD did for you was get you going--and guess what, you'll notice all of us 2WDers found a way to get going, too." In the winter, in bad weather, it's kind of a game when we drive north to ski to count the number of SUVs and pickups inverted in the ditch.

We live on a dead-end street with a 12% grade between our house and the entrance. Sometimes we have to go to the bottom of the street for a running start, but in over 10 years of living here and countless snow storms, we've always made it out with our FWD cars and minivans.
9.6.2005 5:27pm
Anonymous (But Not Creepy) Lurker (mail):
It hasn't been touched on here, but requiring (through CAFE for example) consumer to purchase higher efficiency vehicles actually results in greater energy use, not less. People drive more because they can.
9.6.2005 5:43pm
Ellen Kuhfeld (mail) (www):
The argument for or against different types of transportation depends heavily upon location and conditions. I'd much rather have a convertible in Hawaii than in Alaska, a large car if I had a large family or a small car if I had a small garage. Buses and subways are fine in high-density places, problematic in sprawling cities like Minneapolis / Saint Paul, and nearly useless on an isolated farm. Your Mileage May Vary for many reasons, only some of which are related to horsepower and gross vehicle weight.

If only we were sessile like barnacles, the whole transportation problem would go away! But then, how would we get out of New Orleans ahead of the hurricane?
9.6.2005 5:51pm
Dick King:
bill-10k, I am sorry for your friends, ...

but aren't they the victom of an externality? The car that hit them was just too large.

-dk
9.6.2005 5:59pm
JeffH (mail):
Several independently sufficient negative points have been made... but I'll add another: there's a "race to the bottom" with respect to car safety that faux-hardheaded conservatives ignore w/r/t loss of life in accidents.

Not only do SUVs cause accidents by being far less "agile," they increase the amount of force in the avergae vehicle/vehicle accident, increasing danger. While it's true that per accident, SUV participants are safer, overall harm from accidents is raised by the existence of SUVs due their enhanced forcefulness... and the more SUVs on the road, the more other drivers are encouraged to protect themselves in accidents by driving an equally steroid-inflated vehicle.

Thus, discouraging SUVs by punitive taxation would reduce gas prices, reduce Saudi support for terrorism, reduce the incidence of accidents, and reduce the danger to society from accidents. Conservative "contrarianism" on this issue is revealed, per usual, to be, at best, sophism .
9.6.2005 7:10pm
tjvm:
I'm skeptical of the claim that SUV's are better than other vehicles at getting through water or snow. I believe that four-wheel-drive vehicles are better, and I believe that off-road vehicles are better, but most SUV's on the road are neither. As far as I can tell, most SUV's (especially the luxury SUV's that generate most of the controversy) are designed and intended for city/suburban driving.

On the collision-safety issue, from what I've read, driving an SUV makes you slightly safer in an accident (assuming you hit a non-SUV) at the expense of making people in the other car less safe. Is this behavior we should be encouraging? If we all buy SUV's to be safer, then we spend a lot of money and don't actually get any safer (no more small cars to steamroll).
9.6.2005 7:12pm
MarkW (mail):
On the collision-safety issue, from what I've read, driving an SUV makes you slightly safer in an accident (assuming you hit a non-SUV) at the expense of making people in the other car less safe.

I think JeffH has already addressed this point in part (his post evidently went up while you were composing). In addition to his point about safety of SUV occupants vs. other-vehicle occupants, I'd point out that while SUV's may be safer for their occupants in multi-vehicle accidents, they tend to be less safe in single-vehicle accidents due to their greater roll-over risk.
9.6.2005 7:21pm
Sameer Parekh (mail) (www):
While four-wheel drive vehicles and two-wheel drive vehicles, properly-driven, can handle snow and ice just as well as a properly-driven SUV (and one could make the argument that the lower CG makes them safer because they are less likely to rollover when manuvering to avoid someone who doesn't drive their vehicle properly in the snow/ice), SUVs provide a significant advantage over these other vehicles, and that is clearance. I love my Subaru awd station wagon, but when the snowplow on the main road has created a three-foot-tall berm in front of my street, I call my friend with the SUV to blast a hole in the berm so I can get out.
9.6.2005 7:23pm
Bruce Hayden (mail) (www):
The reason that I won't drive an SUV on a regular basis is that they are more likely to run off the highway in snow. If you don't believe it, then you haven't driven the I-70 corrider west of Denver in ski season. About half the vehicles you see off the road waiting for a tow are SUVs, and most of the ones you see "turtled" (i.e. upside down). What you don't see run off the road very often are the AWD like Audi Quattros and Suburus.

When we started moving up into the mountains west of Denver somewhere around 20 years ago, we started with a Jeep. First winter, my father's BMW was stuck more than it wasn't. So, we started buying Audi Quattros. Four of us have now had some dozen of them over that time and swear by them. And that jeep? Probably got less than 3k miles a year until it fell apart. I will admit that every 3 or 4 years there is a snow storm where a SUV would be nice - as one poster pointed out above, when the high clearance is useful.
9.6.2005 8:52pm
Bruce Hayden (mail) (www):
But if we really are talking SUV externalities, one that is rarely, if ever, discussed is that that extra clearance and all that metal comes at a social price. Last winter, a SUV slid backwards on the Eisenhower Tunnel (I-70) into the Audi I was driving. Its tow hitch punched a hole in the radiator. Ultimately, it cost me about $1,500, with no damage to the SUV.

My point is that the extra clearance often comes at the expense of mismatching their bumpers to those of other cars. So, you have the car bumper running underneath the SUV bumper, not doing any damage, but the SUV bumper being above the car bumper, can, and often does, do damage to the car. So much for 5 mph or 15 mph or whatever bumpers - if they don't match, as they won't with SUVs versus cars, then they won't do their job.

Realistically, then, I would suggest that SUV drivers should be comparatively negligent when the height of their bumpers or the weight of their vehicles aggravates accidents. Thus, for example, even if they wouldn't normally be partially negligent because the other driver hit them, that they would bear some responsibility given that the size and configuration of their vehicle aggrevated the damage, esp. to the other vehicle, and, potentially to the occupants thereof.
9.6.2005 9:00pm
Bruce Hayden (mail) (www):
One of Rush Limbaugh's funniest parody songs is "They drive a Yugo" sung to the melody of Elvis's "In the Ghetto". It tells of a politically aware couple who proudly drive a Yugo instead of a SUV, only to be wiped out. And then another couple does the same - starting the cycle over again.
9.6.2005 9:10pm
magoo (mail):
Someone convinced you that one of the reasons you need an SUV is to cope with the tough D.C. winters? To get to and from GMU in the horrible northern Virginia snow? I have some oceanfront property in Arizona I'd like to sell you. I wonder how our parents coped before SUVs. I guess they just stayed home when it snowed, not being able to "self-insure" and all. All those poor Camry drivers in Minnesota, Buffalo, Cleveland, Maine, etc., how do they manage to go anywhere?
9.6.2005 10:23pm
Observer (mail):
How come everyone is so excited about the "externalities" of SUV use but not the "externalities" of owning homes thousands of square feet bigger than you "need" to live? If you are going to get all high-and-mighty about it, why not demand punitive taxes on houses with more than 3,000 SF? There must be millions of such houses in the US, each supporting all by itself a network of Saudi-financed terrorists.

As for SUV safety, the evidence I have seen suggests that you are safer, all things considered, driving in an SUV than a car. If you are a good, careful driver, one who doesn't speed, that is certainly true. And if you ever have an oil service truck back into the side of your vehicle as you are driving by at 30 mph (as happened to my wife), it is undeniably true.
9.6.2005 10:48pm
Tom from MD (mail):
"It hasn't been touched on here, but requiring (through CAFE for example) consumer to purchase higher efficiency vehicles actually results in greater energy use, not less. People drive more because they can."

Prove it.

If I had a car with twice the MPG, I wouldn't drive much (if any) more, because the dollar cost of travel is much less relevant to me than the cost in time. I drive 50 minutes to work. If I got twice the MPG, I sure as hell wouldn't drive 100 minutes.

BTW, for those who like their SUVs "because they're safer", the only study I saw on fatalities indicated that the safest cars are safer than most SUVs. Mass and it's proper configuration make you more safe, while a high center of gravity makes you less safe. So while you're safer in a Hummer than a Yugo, you're better off in a Camry than an Explorer.

http://aceee.org/pubs/T021full.pdf
9.6.2005 10:51pm
John Jenkins (mail):
This might be the longest comment thread ever without one single comment on the point of the entire post. That's amazing. The point, as I read it, is that when evaluating public policy, we must not only look at the costs of the current policy, but the costs of alternative policies and the differences among them. The tendency is to look only at the bad ("SUV's are bad because they guzzle gas!") exclusively, rather than the good ("SUV's are more mobile in certain conditions because of greater ground clearance.") and bad together as a package.

Of course, that's because the people bringing it up are agitating (I won't dignify these sorts of things with the term "argument" which, as I recall, requires examination of facts) for social policy based on the bad, so they will choose to accentuate the bad. As a result, there will be poorer social policy than if both sides were considered. I apologize in advance for continuing the SUV aside and take no position on whether either of those propositions in the above paragraph is true; I am only illustrating what I believe the point of the original post to have been.
9.6.2005 11:24pm
inmypajamas:
My husband and I have two SUVs because they are useful to a family of four with a large dog that likes to camp, is involved in scouts and sports and likes to do home improvement (there would be a lot of two-car trips otherwise). SUVs are better than minivans for us because they can haul people AND still have lots of room for the people's stuff. If smaller cars worked for us, we'd use them. One thing I've noticed with those who demonize SUVs and the people who drive them is that they are moralistic control freaks - i.e. they are superior to all in their concern for the environment (the only legitimate factor in car design and manufacture) and would love to find a way to deny us our free-market choice in cars and force us to buy the cars they choose for us. Different cars for different needs (or just likes) - that's the free market. I drive what I want, you drive what you want - everyone's happy except for those who want to make you drive something else.
9.7.2005 12:16am
M. Simon (mail) (www):
Dick King,

Not only are some cars too large. So are most trucks.

We ought to limit truck and car sizes to equalize crash risks. I think the weight differential should be no more than 1.5 to 1 given momentum and energy considerations.

If truck drivers had risks similar to car drivers perhaps they would be more considerate drivers.

Besides smaller vehicles get better MPG than large vehicles. It would also reduce road maintenance and costs.
9.7.2005 12:35am
Barbara Skolaut (mail):
Hear, hear, inmypajamas.

I drive a small SUV (Honda CRV). Most of the time, I drive alone - to work, shopping, volunteer activities, etc. HOWEVER, certain times of the year I need all the space in the CRV (and then some) to transport equipment and products for my business.

I used to do it with a car. As much as I loved that car, using it as a truck on those occasions sucked rocks. What am I supposed to do, buy and pay upkeep on two vehicles? Rent a truck - if it's available - on the days and weekends I need it? Why? To please some whiny self-righteous cranks I don't even know?

Inmypajamas has the right idea: I'll drive what I want and others can do the same. And shut up. Just as you're not morally superior to meat-eaters for being a vegetarian, you're not morally superior to SUV owners for driving a small car or a hybrid.

People need to get a grip and mind their own business.
9.7.2005 12:59am
Bruce Hayden (mail) (www):
I think the problem of looking at externalities from a public policy point of view is that we are not omniscient. So, when we try to externalize the costs and benefits of driving, for example, an SUV instead of a car, we are invariably only looking at some external costs and benefits. And by legislating based on only some, we get market distortions.

What has to be remembered here is that the whole debate over SUVs is a result of CAFE standards that exempted light trucks, which include (most?) SUVs. When I was growing up, all of the parents in the neighborhood had station wagons for all the kids. But these almost all disappeared when CAFE standards were enacted, only to be replaced by SUVs. So, you can view SUVs as a rational market reaction to an attempt to overrule the market.
9.7.2005 1:16am
Quaker (mail):
bill-10k: "Flat little cars aren't for me. I drive an F-350 diesel 4x4. ...

... [My friends] were lucky they weren't hit by a truck."


You mean, like yours?
9.7.2005 3:20am
ray_g:
I wrote a nice rant about the foolishness of bashing SUVs (or any other type of vehicle for that matter), but to stay on topic and be brief, and sum up what I think is the point of the post:

Arguments for or against something based on externalities, be it SUV's or anything else, is just sophistry, unless backed by hard data, which usually doesn't exist, and balanced by examining the externalities of the opposite course, which is almost never done. Therefore, I don't think that these types of arguments are very persuasive. But they do seem to get people emotionally fired up.
9.7.2005 2:17pm
Mike G (mail):
Todd-

Your counterexamples aren't true externalities.

I've seen two negative externalities for SUVs mentioned: they use more fuel and create more pollution, and they are larger and move crash risk to drivers of smaller vehicles. If these statements are true, they are true regardless of what actions the government takes.

Both of your counterexamples are of the form "Because government provides service X, people who don't minimize their need for X force others to pay for a service they don't use." The obvious solution to this kind of problem: stop providing service X!

If anyone can come up with some real positive externalities for SUV ownership, I'd love to hear them.
9.7.2005 6:21pm
markm (mail):
"The snow argument is bunk - any modern car with ABS and traction control is up to the task of driving on a "hard" road." If you're only dealing with ice or a few inches of snow, that's true. When the snow reaches the level of the floor of a car with ABS and traction control, it won't get out of the driveway - and even four inches of snow (well under car axles) is apt to result in a snowplow pile over a foot high and several feet thick at the end of the driveway. My 4WD Dodge Dakota will handle that easily (although I'll be driving very slowly once I've blasted through the plow pile). That's due to ground clearance more than to 4WD, although a rear-wheel drive pickup truck with the same clearance would have to heavily load the rear end to get enough traction.

Furthermore, my truck cost less than any car then on the market with ABS and AWD. It's now 8 years old, and still in excellent condition; if I'd bought a car, I'd likely have had to replace it by now to maintain the reliability I need for my transportation to work.
9.7.2005 6:48pm
countertop (mail):
Coming in a little late here - but I'm not giving up my Cherokee for anything. It gets piss poor mileage - and cost me a bloody fortune to fill up yesterday - but its unstoppable in the winter and very comfortable to drive. However, I do not commute to work in it. Rather, I tend to ride my bike the 16 miles from McLean to DC.

Do I get a pass on the SUV ownership because I actually commute in the most environmentally friendly manner possible? Nope, not from my hippie neighbors who think my Cherokee is the devil (it is a bit scary looking with a small aftermarket lift and big All Terrain tires on it).

Only improvement I would suggest - for all cars, not just SUVs would be diesel powerplants. Before I got the Cherokee, I was also looking at the Land Rover Discovey. Disco's get about 12 mpg. However, the guys runnning them overseas don't rely on that mileage, they run diesel powered Discos in Africa that get 35+ mpg. When LR first brought the Disco over to the states they imported some diesels, but for some reason stopped in 1996. Not sure why, but SUVs would be unstoppable if the car makers put diesel power plants back in them.

Diesel - Great mileage and you can run it on McDonalds grease too!
9.13.2005 7:39pm