The cost of cars

I've written a couple of articles about how expensive cars are. The main two are what does it cost to own a car, and how fast do cars actually go?

However, both of these articles ignore a very significant cost: real estate. Let me show this by an example.

Last year, we visited Sydney. We stayed in a great little (and very reasonably-priced) townhouse in Sydney's inner-North (about 10 kms out). The house has space allocated for two cars to park, and this was about one sixth of the land that the house occupied. I don't know what that house is worth, but it would be at least $1 million, and probably $1.3 Million. Therefore, the value of those car parks was about $200000, or about $15000 / year [1] (the opportunity cost of having that money locked up in fairly useless land). This is in addition to all the other expenses I've outlined in the other two articles. Amazing stuff!

Our place is similar (though not worth as much money!). When we moved in, it had a driveway right down one side of the house, a double garage and a carport out the back. I think that between 1/6 and 1/5 of the land was given over to car infrastructure. That's a significant amount of money!

We've been slowly reclaiming that car space as a human space. The carport is gone, the garage will never have another car in it (and may serve as accommodation one day), and we are slowly digging up the driveway to plant more trees. My plan is to eventually have a single car space right at the front of the block, or perhaps none at all.

This weekend I did quite a bit of work setting up a new bed in the former-driveway. I've previously dug up the hard-dolomite-clay hideousness with a pick, and today I worked in some compost and straw and planted a few trees. This will give summer shade to our kitchen window, and the external split-system unit (which will help it function more efficiently on hot mornings, not that we use it much). I've attached a couple of photos below. This also has an added security benefit, because a would-be burglar now needs to leave their car out the front of the house, in broad view of the street.

Our former driveway, now with a bed. Today I planted a nectarine, plum and wooly bush. We'll put a whole lot more there, though -- lots of chook food (leafy greens, comfrey, etc), and some other understory plants. You might also notice that the  wall for this bed is made of broken concrete. I'm slowly removing concrete from elsewhere on my block and instead of sending it to landfill I'm trying to reuse it. This is a bit ugly right now, but I'll put some soil in the wall and let plants grow over it. It also provides shelter for lizards and other creatures.

We've also made the step to letting the chooks run free through the vegetable beds. This was a bit difficult for me, as I was afraid of the destruction. After reading a fantastic blog post about keeping chickens, which said that:

Paddock shift systems often improve the paddock. Some folks report five times more vegetation when using paddock shift like the one suggested here. This is something that vegans do not consider when designing gardens with no animals. So ... imagine .... your garden without chickens produces less than your garden with chickens where the chickens eat 30%. 

We decided to see what happens if we just let them go and see what happened. I must admit, the phrase that popped into my head was "embrace the chaos" -- where before we had straw on the beds and bark chips on the paths, and a garden that many would regard as wild, now we have straw all over the grass and paths, holes in the path, etc. We did lose a few seedlings, and I think in future I'll try to protect them better, but I can already see what a great job the chooks are doing at turning things over. I think this is a work in process that will continue. We're also getting more eggs now, perhaps implying that they weren't getting quite enough food before.

happy chooks -- this bed sustained little damage, though the kale was enjoyed! Seeing a chicken jumping to reach the higher leaves was pretty funny!

Happy hens

----------
[1] I often use economic means to illustrate the stupid things people do. I'm not a money-driven person, and often don't do things for economic reasons, but I feel this is an easier way to communicate some of these ideas.


This article was written by Angus, and first appeared at guesstimatedapproximations.blogspot.com.au

Intergenerational politics

There have been a number of articles recently about the increasing wealth disparity that exists between the baby boomer generation and subsequent generations. These take several forms:

• The ABC had an article about the rapid accumulation of wealth in older Australians versus declining wealth in younger generations. LINK
• This (slightly hyperbolic) ABC article was written about a Grattan report - LINK
• Another article defended the record of baby boomers. LINK
• Yet another article recounted a very personal debate about the vices of the baby boomers. LINK

I think that we need to step back from this. The risk in these kinds of articles is that we establish an intergenerational schism. People get defensive, or aggressive.


So, prior to any analysis I think I should observe that:

• Cultural differences between baby boomers and subsequent generations are very minor (much less than between the boomers and earlier generations). At the individual level, we are no different and would have likely made the same choices (in aggregate) had we been in the same situation. (ie. while I think there is plenty to criticise in what the boomers have done, I think my generation will fare no better)
• In any population or demographic analysis such as this, we are always talking about a distribution. There are many poor baby boomers, and many rich Millennials.
• It is utterly useless to attribute blame anyway

Data

From what I have seen, the Grattan report seems pretty good. It is not inflammatory (unlike some of the others), and is based on data. The most compelling data are shown in this figure:

Data showing welfare receipt in Australia by age. Source: Grattan

My view is that these data are unequivocal. There is a net transfer of wealth from young and relatively poorer Australians to older richer Australians. The critical thing to notice is the large increase in the right-most bar in the 65+ bracket. Also, the right-most two bars of the 25-34 bracket. 

From reading comments on a couple of online sites, there appears to be a lot of misunderstanding what this report is saying and what it means.

This report is not comparing baby boomers in their 30s against today's 30 year-olds.

Instead, it is looking at demographic changes that have occurred in Australia in the last 8 years. What they have found is that, in those 8 years, older Australians have got substantially richer, while younger Australians have become poorer [1]. Let's keep things simple: people who were in the 25 - 35 age group 8 years ago are now in the 35 - 45 age group. I don't think we can attribute these changes in wealth to big differences between these age groups. In other words, I don't think there are large differences between today's 30 year olds and today's 40 year olds in terms of frugality, sense-of-entitlement, work-ethic, etc. I don't think such differences can account for these systemic shifts. 

These are statistics that have been calculated across the entire population. They are not about individuals. This report highlights systemic problems that urgently need to be addressed. You do not want to be living in a country with a poor and disenfranchised youth -- see Libya, Egypt, Iran for what happens. 

-------

[1] In other words, comments like "Well, I was poor when I was young too" do not apply, as what we are looking at here are rapid changes in the relative levels of wealth between different age groups.

Energy efficient behaviour pays

Summary

Investing in energy efficient buildings is a powerful way to save energy, but ultimately the occupants' behaviour is what determines power use. Without spending any additional money, you can reduce your consumption right now by changing your behaviour.

Background

I work as an energy efficiency consultant. Generally, this involves finding investments that can be made (eg. LED lighting, better insulation, variable-speed-drives) that will result in decreased energy consumption. This works well, and there are generally good opportunities for people and organisations to make targeted investments in energy efficiency with good economic returns. However, it is easy to be blind to the most significant effect on energy consumption: human behaviour. Let me illustrate this by way of an example.

My family and I lived in Brisbane for almost three years, arriving in late 2010. We owned our home, and made some energy efficiency investments in it (solar PV, solar hot water, better lighting, blinds). Once these measures were completed, we were using about 5 - 6 kWh/day. When it came time for us to leave Brisbane, the real-estate market was poor, so we decided to rent out the house rather then sell it. We did this for a year and, because of the way the feed-in tariff (FiT) operates in Queensland, we kept control of the electricity supply and were reimbursed by our tenants (had we transferred the supply to them, they would have lost the solar PV FiT). Thus, we were able to see their consumption on a quarterly basis. What was immediately apparent was that their consumption was much higher than ours -- generally it was 2 - 3 times higher. Where we were using 5 - 6 kWh/day, they were using 14 to 18 kWh/day -- in the same house. Clearly, their appliances were different, which could account for part of this, but the majority of this difference I attribute to behavioural differences [1].

What this shows is that simple behavioural change can be hugely significant. Simple behaviours like these have a huge affect on household power consumption:

• whether the oven is used in batches to cook a lot at once, or if it often turned on for only one small dish
• whether appliances are turned off at the wall when not in use
• whether there are many energy-hungry appliances (eg. large TVs)
• when and how air-conditioning is used
• whether lights are turned off
• whether hot food is routinely put in the fridge without pre-cooling
• how hot water is used
• whether computers are left running when not used

Conclusion

This shows that energy efficient measures are important, but that the energy use of a building is determined in the end by its occupants. A positive way of seeing this is that you can save energy, without spending any money, merely by changing your behaviour.

------

[1] We were regularly washing nappies, and we also cook a lot. At that time, we had a relatively inefficient fridge -- thus we could have used a lot less also. Also, note that this house has one small through-window reverse cycle air conditioner, but is mostly not air-conditioned. Thus air-conditioning cannot account for this difference either.

This article was written by Angus Wallace, and first appeared at guesstimatedapproximations.blogspot.com.au

How fast do cars actually go?

Summary

I calculated the average speed that people achieve in cars, considering their actual average speed on the road, and the time they spend earning the money to maintain their cars. I found that, for an above-average income ($60000/year), a person driving 10000 km/year achieves an average speed of only 22.9 km/h. If you earn less than this, you must spend more time earning money to pay for your car, and your average speed is lower still.

How fast to cars go?

What I want to do in this article, is work out how fast people actually travel when they're driving cars. I want to consider actual average road speeds, and also consider the time they spend earning the money to pay for their car and its maintenance.

Traffic Speeds

Average speed of urban traffic in Australia, by time. Source: https://www.bitre.gov.au/publications/2007/files/wp_071.pdf, page 104

This paper, has the 2005 statistics for vehicle speeds in Australia. From it I got this figure, showing that the average speed of cars in urban areas during the day time is about 42 km/h. Of course, congestion has got worse since then, and I would expect average speeds today to be lower, but I couldn't find those statistics.

Combine with time spent earning the money to pay for the car

Across Australia, once on the road, your average speed in the city is about 42 km/h (more like 37 km/h during peak periods). But what about the time you spend earning money to pay for your car? To work this out, I extended this spreadsheet (previously introduced in this article). It now also calculates the average speed of a motorist, based on the 42 km/h on-road speed and the time they spend earning money to pay for the car.

The average speed they attain depends on how much they drive -- as someone drives more, the marginal (time) cost of each extra kilometer decreases so their average speed increases. Here are some examples:

• For a person on an above-average wage, driving 10000 km per year, they average just below 23 km/h
• For a person on the same wage, driving 5000 km/year, they average just below 18 km/h
• They won't reach an average of 30 km/h until they are driving 80000 km/year
• For a person on $40000/year driving 10000 km/year, they average 18.5 km/h

Conclusion

1. When you consider the time spent to pay for a car's maintenance, and the actual speed you achieve on the road, cars are not actually a quick way to get around. 
2. The cost, to the taxpayer, of car infrastructure is huge -- I question whether it is good value for money.

-------
This article was written by Angus Wallace and first appeared at
guesstimatedapproximations.blogspot.com.au

What does "sustainable" mean?

Sustainable is a word we often hear. What does it mean?

Maybe when you hear the word "sustainable" you think about hippies, solar panels, or Priuses. I want to convince you that none of these, or any other value-judgements, are part of it.

Merriam-Webster defines sustainable as "able to last or continue for a long time".

Simply put , if an action (something we do) is sustainable, then we will be able to keep doing it indefinitely. If an action is not sustainable, then we will not be able to keep doing it.

Money

An example that is easy to understand is budgeting money:

"Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery."
Charles Dickens, "David Copperfield"

In other words, it is not sustainable to spend more than we earn. If we try, we will probably be ok for a while (as we draw down our savings, sell things, etc), but eventually our actions will catch up with us and our spending will be reduced (by forces beyond our control). Also, think about the likely suffering that will occur in this process: as we owe money to our friends (debt), get evicted from our house, etc.

This seems so simple: spend less than you earn. How is it that so many people get into deep financial trouble by breaking this simple rule?

The reason is that life is complex. It is not always obvious that we are in the process of spending our capital to prop up an unsustainable lifestyle, or accumulating debts that can't be repaid. When it does become clear, people can feel that they are committed to that lifestyle and cannot reduce their spending. This is how people can end up with nothing*.

Fisheries

A very similar process can be observed with fishing. If we wanted to summarize the history of fishing, it would go something like:

• Find a new fish to catch (eg. North-West Atlantic Cod)
• Fish it until the fishery collapses and the fish can no longer be caught (not quite to extinction, perhaps, but until the system is destroyed)
• Find a new fish to catch
• Repeat

It's clearly against the everyone's interests for this to happen, but it has happened time and time again: unsustainable fishing has destroyed people's livelihoods. It wasn't always apparent that the industry was unsustainable and when it became apparent, people felt they had no choice but to continue. I should emphasise that the consequence of unsustainable fishing can be very similar to the consequences of unsustainable spending: poverty in the communities in which they occur.

It can also happen that the point of no return occurs before people notice. Also, even when there is a regulatory body charged with preventing overfishing, it is still very easy for damage to occur.

Environmental Sustainability

Hopefully these two examples show that this is a general principle that can be applied broadly. It certainly applies in general to our relationship with the environment in which we live. Things that we do that are unsustainable will not be sustained. I'm not saying we oughtn't or mustn't continue to do it. I'm saying we won't continue to do it, and that events beyond our control will stop us from doing it -- in the same way as a bankrupt, debt-ridden person will not maintain their high-spending lifestyle, no matter how hard they try.


---------------------------

* this is clearly an extremely simple sketch of a very complex thing, but I think it covers it in broad strokes.


This article was written by Angus Wallace, and first appeared on guesstimatedapproximations.blogspot.com