Kiasunomics 2: Economic Insights For Everyday Life. Sumit Agarwal
your taxi? You drive a lot and throughout the day,” added Siew Ling, the wife who is concerned with expenses.
Before Teng could reply, Ah Mah said, “I think more people will take public transportation that is not only cheap but also convenient. Your father and I were at the community centre this morning and they encouraged working people to take the MRT early to reduce crowding.”
Incentives to Ease Congestion
Earlier that day, Ah Kong and Ah Mah were at the community centre attending a talk organised to encourage people to take public transportation during off-peak periods for their morning commute.
“But if everyone were to take the MRT, then each train carriage will be super crowded. I’ll be squeezed like sardines in a tin can. Why would I want to do that?” quizzed Ah Mah.
“And if you were working, you’d have no choice but to do this twice every day during peak periods – when going to work and when coming home. Urgh . . . Having to stand so close to each other and bear with the armpit smell. How horrible,” Ah Mah shuddered.
“Let’s just go and listen. We are not affected since we don’t need to travel during peak periods. Let’s hear what the LTA (Land Transport Authority) has to say. Maybe they have brilliant ideas,” said Ah Kong, somewhat sarcastically as he was still sore with the numerous MRT breakdowns he had experienced.
“Thank you everyone for coming to this talk. Please grab a seat quickly as we will begin soon,” announced an administrator from the community centre. As usual, she tapped on the microphone to make sure that was working.
“I’m sure all of you have encountered instances when the MRT is so crowded that you either have to stand very closely to one another or worse, miss the train and be late for work or an appointment. Today, we have Mr Yang from the LTA to share with us steps that the LTA is doing to alleviate overcrowding in trains. Mr Yang, please.”
It turned out that Mr Yang was in charge of special projects at the LTA which included studies on incentivising Singaporeans to take the MRT during off-peak hours.
“I wonder whether our neighbour, Josie, knows Mr Yang,” whispered Ah Mah to Ah Kong. Josie used to work at the LTA, although now she has moved on to the NEA (National Environment Agency).
“Shh . . . He’s going to speak,” whispered Ah Kong to remain polite and attentive.
Here’s what Mr Yang had to say:
“Overcrowding is a serious issue. In New York, 40 percent of its subway train delay incidences are caused by overcrowding. We want to avoid such a situation.
“We recognise that riding in a crammed MRT can be a miserable commute for people especially if this occurs twice a day, five days a week, when going to work and back home.
“Whilst spending on more personnel, trains and infrastructure may help to alleviate overcrowding, the reality is that there are diminishing returns on such investments when the demand for these extra resources is concentrated only at certain times. First, there are physical limits to adding more trains. Worse, these expensive additional trains would be left idle during off-peak hours.
“So we started thinking of other strategies that we can do to alleviate overcrowding. One solution is to persuade commuters to stagger or spread out their journeys. Why should everyone travel at the same time? Instead, we want to encourage people who can shift their travel time, to take the MRT at less busy times.
“The question then is how to make this shift not only successful but also lasting.”
Mr Yang waited for a while to let the information sink in, and then continued.
“In some countries, the authorities impose surcharges during peak hours to discourage such travel. But studies have shown that such surcharges have little impact on travel patterns. I’m sure you don’t like to see fare hikes, right? Well, studies also show that surcharges only add to commuter resentment to having pay more. Moreover, imposing surcharges is politically unpopular.
“So what can the LTA do to encourage Singaporeans to stagger their commute time so that people can have a more comfortable MRT journey especially during peak hours?
“We partnered with NUS Business School to examine which type of incentive scheme would be effective. Today, I’ll be sharing with you one of several studies that we’ve conducted.”
Mr Yang looked around the audience, made up of mainly retirees, to see that they registered what he had said so far.
He thought to himself. “Sigh . . . It’s unfortunate that the audience doesn’t have many working adults. This is not exactly the target audience we want. Hopefully they’ll convey today’s message to their children. Perhaps we’ll have to conduct more of such talks at workplace areas during lunch time.”
Aloud, Mr Yang addressed the crowd. “In this study, we recruited 350 regular morning commuters as participants. We monitored their MRT commute for 20 weeks first to see the average time they exit the station.
“Then we asked ourselves, ‘If we were to give them some incentives, would they use the MRT earlier and hence, exit the station earlier?’ In other words, we want to encourage them to use the MRT before their usual time so that ridership can be spread out across times to minimise overcrowding during peak periods.
“So we divided these 350 commuters into three groups. One group did not receive any reward. They are what we call the Control group. They travelled as usual and paid the normal fare. The other two groups received an incentive. One group was rewarded a full rebate of their fare if they exited the station before 7:45 AM. In other words, they travel for free. We call this group ‘Early Treatment’. The other group received a full rebate if they exited by 8:00 AM, and we call this group ‘Late Treatment’.
“Now, you can well imagine that if you were one of the participants and you just missed the free travel cut-off time, you might be upset that you had just missed getting free travel, right? So to avoid such disappointment, those who narrowly missed the cut-off time were given a 50-cent discount during a 15-minute grace period from 7:45 to 8:00 AM (for the ‘Early Treatment’) and 8:00 to 8:15 AM (for the ‘Late Treatment’).
“Let me show you the various groups and incentives:
| Group | Behaviour | Reward |
| Control | Travel as normal | No incentives given |
| Early Treatment | Exit MRT station before 7:45 AM | Full rebate of fare |
| Late Treatment | Exit MRT station before 8:00 AM | Full rebate of fare |
“We then monitored their travel patterns during the 10 weeks when the incentives were given. After the incentive programmes were over, we continued to monitor their commute for another 30 weeks to see whether the incentive programmes were persistent in changing commute behaviour. So altogether, we monitored their travel patterns for 60 weeks – 20 weeks before the rewards were given, and 40 weeks after they were given, of which 10 weeks were the reward period.”
“Is this all good? You follow me?” asked Mr Yang.
The audience nodded. Satisfied, Mr Yang carried on, speaking slowly and clearly.
“Here are the findings:
“On the left margin is the exit times in the morning when commuters go to work. Remember that we want to encourage them to exit earlier than usual to relieve congestion during the peak period.
“The solid line is the Control group