Is "Luxury Travel" a Public Good?
The bureaucrats at Amtrak seem to think so:
Beginning this fall, travelers with an extra few days and money to spare will be able to climb aboard seven richly equipped vintage Pullman cars attached to Amtrak trains on three routes.The promotion is a test of a partnership between District-based Amtrak and GrandLuxe Rail Journeys, an Evergreen, Colo., company formerly known as the American Orient Express.
…
The trips’ prices will range from $789 to $2,000 per person for one- to two-night journeys.
This is, of course, utter nonsense. No rational consumer would pay more for a multi-day, not-at-all-scenic train ride than for first-class domestic airfare. That’s not a question of subjective tastes and preferences; it’s a question of objective “paying more for less” irrationality. And while there may be a handful of rich but irrational consumers (e.g., those with a fear of flying), there will certainly not be enough to make this a viable enterprise. The service will flop, and flop badly.
And besides, isn’t the standard bromide of Amtrak’s apologists the (no less absurd) postulate that government should underwrite affordable passenger rail? That (non-rich) Americans need, for some reason, an alternative to cars, buses and planes? How, exactly, is “expensive luxury train travel” a public good?
To review: The parts of Amtrak that lose money (i.e., almost all of it) lose money because few use it (i.e., few “need” it). Meanwhile, the tiny sliver of Amtrak that does make money (i.e., the Northeast Corridor) by definition needs neither a $1 billion annual subsidy nor, for that matter, to be run by the government in the first place. Amtrak is its own best argument for its abolition.
Yet instead of acknowledging this basic syllogism, Amtrak’s managers and political protectors actually retrogress and sink deeper into the illogical muck of providing a service that nobody wants or that the government has no business being in the business of in the first place.
The mind reels.
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[W]hile there may be a handful of rich but irrational consumers (e.g., those with a fear of flying), there will certainly not be enough to make this a viable enterprise.
There being nothing irrational about catering to one's personal taste, I had to puzzle over this for a minute before I figured out that you weren't using "irrational" in the economic sense.
A more likely target group is railfans—people who enjoy the experience of rail travel for its own sake. I have no doubt that Amtrak could make good money offering luxury rides to railfans several times each year.
Of course, that won't solve their bigger problems.
I can't speak for the eastern portion of the country, but in the Midwest it's painfully obvious where Amtrak gets its money; handouts taken by force from people who would otherwise prefer to see it rot, because its service is so poor.
WP,
I've been known to enjoy a scenic rail tour — when its scenic. This is not.
If you read the article, the service is definitely being touted as an alternative to "frustrating" air travel, not as an experience in and of itself.
This is precisely why the NE Corridor operates profitably at all (NY –> DC is actually faster AND CHEAPER by train than by air, all factors included). But this service is slower and more expensive — so, um, why use it?
If GrandLuxe can make a go of it, then hooray for them. But they should leave Amtrak and its $1 billion per year taxpayer subsidy out of it.
Again, I have less faith in Rational Man than you, but I suspect this is one of those instances in which rationality will win.
Amtrak And besides, isn't the standard bromide of Amtrak's apologists the (no less absurd) postulate that government should underwrite affordable passenger rail?
Even if we only judged it by its ability to supply the poor with cheap travel, it would STILL be an objective failure.
One-way ticket from St. Louis to New York on Amtrak: $102, 25 hours and includes one train transfer.
One-way ticket St. Louis to New York on Greyhound: $54 if I buy it two weeks in advance, 23 or so hour travel time(I have a lot more choice in terms of departure times), and no transfers.
[...] Beats spending a week on a train (and if it doesn't, then you can "soar" on Amtrak, thanks to neverending taxpayer subsidies to the train that no one [...]