Marginal and average costs, and the price of bike commuting

One of the things which changed during my year in Ottawa is that I became a year-round bike commuter. I’ve decided to try to keep this up in Edmonton, despite some (potentially important) differences in climate and snow clearing between the two cities.

One of the factors in my initial decision to ride to work was savings in terms of the cost of gas and parking, which made up for most of the additional cost equipment required to bike through the winter in just one year. At Environment Canada, the cost of a monthly parking pass was $170, compared to a daily rate of $9. It was easy to figure out that, as long as I could expect to ride to work more than a couple of days per month, I would be ahead on parking costs not to mention fitness. In January, I drove to work 5 times, which was the most all year, so my worst month saw me save $125 on parking, plus the savings in fuel.  So, each morning I had a no-bike tax of $9, but the average cost to me each month was actually negative.

This pricing relationship is very different at U of A as a monthly pass costs only $96, while daily parking is $14. I’ll have to ride to work at least 14 days out of 20 to make it pay to not get a parking pass. However, if I don’t buy the pass, my marginal incentive (my no-bike tax) will go up to $14/d making it much less tempting to drive to work on the really cold days. It’s possible that, in the cold months of the year, I’ll lose money by not buying a parking pass but I’ll bike more if I don’t have one.

I might be out a few dollars, but I’ll be in better shape in the Spring. Sometimes, economists do think about things other than money.