Economics at the wheel

by Richard C. Porter

Beyond issues of convenience, style, safety, innovation, and mobility, automobiles raise questions about the ways that markets work and do not work. Almost all of our automobile problems arise from the car's generation of external costs. These costs, when added to the private costs of driving, make driving a socially expensive habit. And by evaluating this habit from an economic perspective, we can develop cost-effective policies to save lives, use less gasoline, and decrease pollution. In his examination of automobiles, driving habits, and government policies, Richard Porter presents an analysis and critique of cars and the ways they are regulated.