Tuesday, February 19, 2013

Restaurants and Bridges - Logic Test

I live on the mainland.

Nearby is an island with three towns on it.

There is a wide range of restaurants on both the mainland and the island.

The island is connected to the mainland with a bridge.

There is a proposal to introduce a toll for cars crossing the bridge. It is assumed (based on a nearby similar bridge) that the toll might be $4 each way, but less than $1 for local residents using the EZ-pass automatic toll system.

Owners of restaurants on the island say the tolls will destroy their businesses.

Owners of restaurants on the mainland say the tolls will destroy their businesses.

My question is: Is it logical to believe that both the previous statements could be correct?

Here is the way I see it....

If I live on the mainland and I want to go out to dinner, I might drive to restaurants on the island less frequently. Instead I will visit restaurants on the mainland.

If I lived on the island and I wanted to go out to dinner, I might drive to restaurants on the mainland less frequently. Instead I would dine more at restaurants on the island.

I am not going to eat out less because of a toll on a bridge. At most I am going to choose to eat at different restaurants. So the total amount of money spent at all the restaurants on the island and the mainland is likely to remain about the same.

But if more people currently choose to drive from the mainland to the island to dine than vice versa, and the tolls inhibit people from crossing the bridge, then business at the island restaurants will go down and business at the mainland restaurants will go up.

Conversely, if more people currently choose to drive from the island to the mainland to dine than vice versa, and the tolls inhibit people from crossing the bridge, then business at the mainland restaurants will go down and business at the island restaurants will go up.

Assuming that people eat out as much as they currently do, how can the proposed tolls kill businesses on both sides of the bridge?

(The real life situation is a little more complicated than I have described it because the island is actually connected to the mainland by three bridges, one of which already has a toll. But I think the same basic logic applies.)

Am I missing something?


Could the solution be to do what these clever people in Moscow have done which is to hang a restaurant from a bridge?



20 comments:

B.J. Porter said...

If you are talking about the Mt. Hope bridge, there used to be a toll - 35 cents, one way.

Did local restaurants on both sides of the bridge explode into wealth and prosperity when they stopped the toll?

Though in that case I think the people causing traffic while hunting for dimes at the payment booth were more of a deterrent to cross water dining than the 35 cent toll!

Anonymous said...

I would suggest that anyone worrying about $1 shouldnt be dining out anyway.

Tillerman said...

The discussion has been triggered by the completion of the new Sakonnet River Bridge between Tiverton and Portsmouth, although bringing back the tolls on the Mount Hope Bridge is also part of the debate. The state government has decided that it really would be a good idea to spend some money on maintaining the new bridge rather than just letting it decay to a point where it is beyond repair like they did with the old Sakonnet Bridge.

Of course the proposal to toll the bridge has caused a huge local outcry. The alternative would be to raise the money from some form of taxation - perhaps increasing vehicle registration fees for example.

MYCSunfish Fleet said...

If the quality of the restaurants on each side of the bridge is equal, your logic is good.

Worse yet, am I going to have to pay a $4 toll to get to LaserPerformance?

my2fish said...

wait, I know this one! first you take the goat, then take the cabbage. then bring back the goat, now take the wolf, and then go back again for the goat.

Anonymous said...

I would suggest that anyone worrying about $4 shouldnt be buying parts from LaserPerformance anyway.

Tillerman said...

Mmmmm. Goat stew with cabbage at the DeWolf Tavern. Worth the toll!

my2fish said...

I agree with that! (if they have anything in stock)

my2fish said...

I was thinking goat cheese, sausage and sauerkraut at the Wolf & Firkin Pub.

laserista torpe said...

And you call yourself sailors? .... Sailors don't need bridges!

;)

Anonymous said...

Why don't they collect tolls from the boats going under the bridges instead of the cars going over the bridges?

Anonymous said...

They don't.

Dallas Dude said...

All transactions have some amount of friction associated. Increase friction and transactions go down while decreasing friction causes transactions to increase. The toll bridge hurts business on both sides.

O Docker said...

I think your logic is sound, but the offer to locals of a negligible toll is probably a scheme to stifle resistance.

When I was a kid, we had to cross a small bridge across the Delaware River to drive 'down the shore' from Philadelphia. The toll was five cents and locals were told that would be in effect only for 20 years to pay off the cost of bridge construction, after which there would be no tolls.

Fifty years later, the bridge toll is $2.00 and the bridge commission proudly boasts that the toll hasn't been raised in 12 years. I think the members of the bridge commission eat out a lot at restaurants on both sides of the river.

Tillerman said...

O Docker, I am sure you are right about the thinking around the reduced toll for locals. I don't think they have announced what the new tolls would be yet, but my example was taken from the Newport-Jamestown Bridge which is one of the three ways on to and off of Aquidneck Island.

To be fair, some local people have to travel backwards and forwards across these bridges several times a day. Like a business owner who lives on the other side of the bridge from his business. Or a business like a florist who may deliver several times a day to customers on the other side of the bridge. Or a retired Laser sailor who makes 4 bridge crossings in total every time he wants to go sailing in Bristol.

Wait. Where was I? Where am I?

Oh yes. Of course, the real reason for the rule about 83 cents for RI residents and $4 for everyone else is so we can make all those rich people in Massachusetts and Connecticut pay to maintain our bridges in Rhode Island.

Tillerman said...

Friction? What has friction got to do with it? As all regular readers of my blog know, WD40 is the solution for friction.

Anonymous said...

Living on the island, I hope they toll the damned thing. Vocal minority up island that go back and forth over the Sakonnet multiple trips every day, because they can for free. Ain't gonna hurt business down here, and truthfully be better if all three bridges bite the dust and we play like the Vineyard.

Liking your blog, frostbiter down in the south part of the island and truthfully, nothing north of one mile corner of interest.

my2fish said...

what do you think - are these goats yelling about eating cabbage or in fear of wolves?

Tillerman said...

I think if I lived down in Newport I would feel the same way. So many things to do in the one town, but then it's full of all those damn tourists in the summer.

Living in Tiverton I do tend to use the Sakonnet and Mount Hope Bridges a lot, but I really can't understand the outcry over what will probably be an 83 cent toll for RI residents. When I lived in NJ it was a lot more for tolls to get to Manhattan or Long Island or Connecticut, or even the Jersey Shore for that matter, but not so much that it was a factor in deciding whether to go to those places or not.

Joe Rousé said...

Merchants love to complain. When the big shots in our local government decided that the Embarcadero Freeway should be torn down, the folks in Chinatown had steam coming out of their ears. "No one will ever come to our fabulous MSG restaurants if you tear it down!" The removal of the nasty structure was one of the best things to happen to this city. Besides, it costs $6 to come across the bridge into San Francisco, and from what I've seen, the restaurants are packed.

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