Writing a Paper about the Hyperloop

"Tim (Fractal Footwork)" (fractalfootwork) 12/01/2013 at 16:28 • Filed to: Hyperloop, Economics, Elon Musk, OppositeLock

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I'm arguing for a policy advisement based off of the economics involved in its construction and implementation. First I am going to determine if the Hyperloop should be publicly funded or privately funded, then determine at what price each ticket should be for each strategy. I am going to talk about taxation, but it's probably not going to be the case, unlike with roads, since the use is minimal for a small set of people.

All I have for a source so far is the !!!error: Indecipherable SUB-paragraph formatting!!! . If anyone knows of any other interesting references, even including the California Rail Project, it would be much appreciated.

Any questions are also welcomed.

davedave1111 > Tim (Fractal Footwork) 12/01/2013 at 16:35

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"First I am going to determine if the Hyperloop should be publicly funded or privately funded"

You might like to think about whether it's even possible for something like that to be private. If it can't be built without enabling legislation and/or compulsory purchase/eminent domain, then there's monetary value in what would be something akin to a state-granted monopoly (or at least, license) on Hyperlooping.

Tim (Fractal Footwork) > davedave1111 12/01/2013 at 16:43

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True. I can sort of skirt that stipulation though since this is for a Public Econ corse and I can just say we assume something, like the legislation.

DCCARGEEK > Tim (Fractal Footwork) 12/01/2013 at 16:44

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Please see ongoing California HSR fight over bonds as a perfect example of the world of large infrastructure project funding.

Tim (Fractal Footwork) > DCCARGEEK 12/01/2013 at 16:46

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Do you know of any good references for this?

davedave1111 > Tim (Fractal Footwork) 12/01/2013 at 16:53

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You can't really skirt it with any validity, because to do so is to ignore the opportunity cost: that is, if Hyperloop-scale projects are being considered, is the Hyperloop necessarily the one which makes the most out of the land, disruption, and so-on.

Out of interest, are there any good numbers on the economic benefits of improved transportation links? Because if the hyperloop could actually be built as described, the improved transport links between LA and SF wouldn't have to show a very big multiplier on the two cities' GDP to be worth tens of billions over a decade or two. An increase of just 0.1% of California's GStateP is $2 billion a year, for example.

In anything approaching that situation, the argument for public funding is overwhelming.

Of course, the big deal is running costs. Has anyone guesstimated what they might be?

DCCARGEEK > Tim (Fractal Footwork) 12/01/2013 at 16:54

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I haven't been following it very close, but I'm sure any of the news sites that report on California's state ongoings will have some good info. Also check GAO as I think they did a look at it too.

RacinBob > Tim (Fractal Footwork) 12/01/2013 at 17:33

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Here's , my question, will anybody stand riding in it. Its got a big centrifugal turbine up front, so, how noisy is it? Mass transit for the deaf? Let's not get too excited quite yet.

orcim > Tim (Fractal Footwork) 12/01/2013 at 17:40

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Hmmm...reminds me of any large infrastructure deal that had no initial market. Interstates, nuclear energy, etc. They all had public funding or loan guarantees until the market was established and could fund itself - but it would never have happened without the initial public funding. (This applies to a lot of fundamental technologies like in the space program, etc.) Creating a link between "where we are" and "where we're going" seems like it would be a useful foundation to such a study.

Also, there's indirect possibilities that may come into your analysis. Once the right of way and easements are established (and I consider this to be the largest factor - money will be easy compared to this) it can be used for other things. Railway easements being used for fiber cable laying by content and telco companies, energy pipelines, etc. An additional 3'x5' cable vault next to the Hyperloop through-way may have some serious revenue potential. It could even be used to attract server farms for the west coast, etc. Kinda limited by imagination here, which is to say, not really limited.

Ghost in the Machine > Tim (Fractal Footwork) 12/01/2013 at 17:41

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Here's the link to the California High-Speed Rail Authority site. It can be a little daunting to navigate. This link is for overall funding and finance . This l ink is for the individual project segments . You'll have to dig to find specific budget info there since each segment's info is organized differently.

Tim (Fractal Footwork) > davedave1111 12/01/2013 at 17:50

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From reading the paper, the running costs are minimal concerning power (solar), and the logistics should be automated. There is probably something I'm missing though.

What I'm going to calculate is the time saved per passenger and multiply that times how much their time is worth, not an improvement in the cities' income. My goal in comparing the public vs private is to compare each's relative social marginal benefit.

The question really is: Should we ,as the government, take this private idea and turn it into a public one?

davedave1111 > Tim (Fractal Footwork) 12/01/2013 at 17:59

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"From reading the paper, the running costs are minimal concerning power (solar), and the logistics should be automated. There is probably something I'm missing though."

What you may be missing is that the Hyperloop is an idea to generate discussion, so although you can analyse the proposal as if it were real, it's not actually something that can be built as described.

The thing about something like the Hyperloop is that although use of it is not a public good , the economic benefits it brings can be. The best argument for the state to do something is if it benefits everyone.

Your analysis of time-value saved per passenger tells you what level you can set ticket prices at, but it can't tell you whether it's worth subsidising the system as well.

Essentially the Hyperloop is just a fancy-schmancy road. All the arguments for roads being public projects - and almost all roads are, everywhere on the planet - apply to the Hyperloop, assuming it brings sufficient economic benefits to justify the expenditure.

Tim (Fractal Footwork) > davedave1111 12/01/2013 at 18:04

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Yes.

I'm not saying it should be a public good, but that is what I have to pit my argument against for this class. I am going to argue that it should be a private good because taxation funding would not be efficient.

davedave1111 > Tim (Fractal Footwork) 12/01/2013 at 18:11

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Unless I've misunderstood the terms of the question, it's not a matter of 'should'. Either it is a public good, or it isn't.

Seats on the Hyperloop will obviously not be a public good: they're rivalrous unless lap-sitting becomes the order of the day... But if it brings an economic benefit to the connected areas, then that will be a public good because no-one will be excluded and everyone can benefit without taking from anyone else.

It seems to me to be a strictly economic question: will the public benefits of the Hyperloop outweigh the costs of building it sufficiently to make it a good idea for the state to do.

orcim > RacinBob 12/01/2013 at 18:12

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I'd consider this question to be a "been solved before, so (assuming) it can solved again." Airplanes come to mind. You ever been in an old one, or a smaller less insulated one? Noisy. But that's been overcome.