The Trick with Carrots and Sticks
What motivates you to change your habits? Carrots or sticks?
If I gave you $1,000 would you give up fried foods forever? If fried foods were exceedingly expensive, would less people consume them?
Interesting questions. And the types of questions I have to deal with everyday as I try to encourage people to change their commuting behavior.
I’ve been conducting a commuting audit for a local organization. Currently, this organization offers free parking passes for all of their employees. As a result, all of these employees park downtown.
Given the economic times, this organization is looking at ways to cut costs, and providing $130/month for each employee for a parking space is starting to look like a lot of money.
So that’s where I come in. I’ve been chatting with each staff member and asking them what other options might work for them. Pretty much every staff member knows what his/her options are, from using the Park & Ride Lots to biking to work to carpooling to telecommuting. And it’s clear to me that if this organization stopped paying for parking, many of the staff would use one of those other options rather than pay for parking themselves.
Here is a case where a stick would work to change behavior. We saw the same thing with gas prices.  No one likes to lose something, especially when it feels like a pay-cut. And for some staff it is just easier to park at a park and ride everyday and take the bus to work than others. If that’s the case, should everyone get the same stick, or only some people?
At the same time, the getDowntown Program offers lots of carrots to try to get people to change their commuting behavior. We have a huge carrot known as the go!pass, that gives employees unlimited rides on the buses, including to park and ride lots in addition to other incentives.  But those carrots only work if there isn’t also a chocolate cupcake (such as employer paid parking) on the plate. In addition, our carrots are only as effective as the bus service, or the bike lanes. If the buses don’t run frequently enough or the bike lanes are poorly maintained, our carrot becomes less and less appealing.
The reason I am troubled by all of this is that people see sticks as bad. Our society sees restrictions as bad. We are all about freedom of choice. I think that’s why carrots are so appealing. But my carrot will only work if there isn’t a better incentive out there.
It would be interesting to see if I could offer an incentive big enough to get people who have free parking to use the bus or bike instead. Maybe that carrot has to come from the person themselves.
I do see this happen sometimes. Sometimes someone is so health conscious, they’d rather bike to work than drive. Sometimes the cost of having a car is enough of a disincentive that the go!pass can be a better carrot. And sometimes, perhaps, people just don’t want to deal with parking downtown, even if it is free, so the other options are more appealing.
For the most part, I’ll continue to try to offer my carrots. And when the sticks come, I only hope that after the pain wears off that there is some openness to what I have to offer.
Something I’ve thought a lot about is America’s distinct dislike for regulation – which is a big reason why we’re in this whole financial crisis. But it plays into a lot of other areas as well. For instance, countries like The Netherlands and Denmark put strict regulations on owning and operating an automobile, so people who don’t absolutely need one often don’t own one, unless they have a lot of extra money to burn. Not only that, those countries put a lot of money and effort (compared to the U.S. – but not nearly as much money as we put into our highway system) into making travel by transit or bicycle more convenient, easier, and cheaper than travel by personal automobile. What this means, is that in cities in those countries, people choose to walk, ride a bike or take public transit simply because it’s more convenient for them than driving.
However, in the U.S., it would be seen as scandalous by the public to “manipulate” circumstances like that – except that what they aren’t telling you, is that they are manipulating circumstances like that, to make it more convenient, cheaper and easier to drive instead of use other options. It just all happens behind the scenes by tax subsidies and street planning policy and such.
Comment by Dave — September 1, 2009 @ 10:21 amFrom the field of behavioral economics, there is evidence that potential losses are more motivating than potential gains. In The Paradox of Choice, Barry Schwartz has a discussion of this “loss aversion” phenomenon. Schwartz cites research by Kahneman and Tversky demonstrating that, “Losing $100 produces a feeling of negativity that is more intense than the feelings of elation produced by a gain of $100.â€
In the book Fostering Sustainable Behavior: An Introduction to Community-Based Social Marketing, the author provides a discussion of positive (gain) and negative (loss) framing: Behavior change “messages which emphasize losses which occur as a result of inaction are consistently more persuasive than messages that emphasize savings as a result of taking action.”
The Irritant Theory of Driving Behavior Change
There is an intuitive psychological theory as to why cashout is not very effective. High-paid office workers ignore small-benefit programs such as $4 per day cashout (being paid not to park at a suburban workplace). This “carrot†is not a sufficiently large motivator to cause commuting behavior to change. Employees will not think about the cashout on a regular basis. I believe that parking charges will “irritate” SOV commuters. These SOV commuters will think about the parking charges every day they commute. Eventually this irritant gnaws at them long enough to cause many to change behavior. Changing commuting mode choice is a significant decision because of relatively high barriers to changing away from the convenience of driving alone. This difficult decision is not a “snap decision” and may require pondering over many weeks. The same $ value of irritant/stick has a much higher impact than the same $ value of cashout/carrot. The intuitive theory is well substantiated from field results:
A 1989 study found that commute carrots are less effective than sticks: “A program of transit and vanpool subsidies as well as preferential parking for carpoolers had little effect until Twentieth Century Corporation in Los Angeles raised the price of employee parking from no charge to $30 per month for solo drivers. Solo driving decreased from 90 to 65 percent after pricing.”
A 1990 paper found that charges changed behavior where incentives had not: “CH2M Hill in Bellevue, Washington began charging solo drivers $40 per month for parking, the amount the company pays the building owner for parking. All employees receive a $40 per month travel allowance in their paychecks. Carpoolers park for free. Walkers, cyclists and drop offs keep the travel allowance. Solo driving declined from 89 percent to 64 percent after the parking policies were put into place.”
Excerpts from: http://www.cities21.org/TRB_Paid_Parking2.pdf
Comment by Steve Raney — September 1, 2009 @ 11:19 pmGreat Comment Steve! In my experience there is definitely a connection between parking pricing and behavior change. If people don’t have to pay for parking, they are much more likely to drive. Once they have to pay for parking, the start to consider other options. I was at a presentation today where the same was borne out in a study of employers in Arlington, VA. However, that study also showed that as transit incentives went up, use of transit also went up. I also see this in Ann Arbor. So incentives can work to change behavior, but it has to be a pretty big incentive.
Comment by Nancy Shore — September 1, 2009 @ 11:38 pmArlington is indeed a great success story. If you have a job in DC, Arlington is a great place to live. I’m not sure if it’s fair to say that incentives-alone work in Arlington. For commutes to DC from Arlington, DC is extremely auto-hostile, penalizing SOV commuters in various significant ways.
I wonder how the federal commute benefit increase is working? That is a huge financial carrot. That would be helpful to know.
More factoids on pricing, etc:
The 2009 “Moving Cooler Report†states that moving to European level gas taxes, “starting at $2.40 a gallon in 2015 and increasing to $5.00 a gallon in 2050 could result in a 28% reduction in GHG emissions.†[Moving Cooler: An Analysis of Transportation Strategies for Reducing Greenhouse Gas Emissions, by Cambridge Systematics, July 2009. Published by Urban Land Institute. http://www.uli.org. pg 80] Here’s a comparison of US and international gas prices: http://www.cities21.org/gasPriceVsVMT.htm
VTPI’s 2009 Transportation Elasticities Report is really helpful:
Comment by Steve Raney — September 2, 2009 @ 11:44 am* Parking fees are found to have a greater effect on reducing vehicle trips compared to fuel price increases, typically by a factor of 1.5 to 2.0 (USEPA, 1998). For example a $1 per trip parking charge is likely to cause the same reduction in vehicle travel as a fuel price increase of $1.50 to $2.00. [pg 18]
* $4 parking charge for suburbs yield a 36.1% reduction. [pg 19, Table 15]
* Shoup found that charging for parking reduces SOV by 20-40%. [pg 21]
[From: Transportation Elasticities, Todd Litman, VTPI, August 26, 2009, http://www.vtpi.org/elasticities.pdf.