Wealth Consumption Investment in Transport Infrastructure: Repaving a Sidewalk

Wealth Consumption Investment in Transport Infrastructure Repaving a Sidewalk

Photos: Gregory Levine.

Transport investments tend to be depicted as wealth-producing, providing employment, and improving accessibility. Such an assertion must, however, be nuanced by the type of infrastructure and the setting in which the investment takes place. Over this point, the above example of a sidewalk repaving project (City of Claremont, California, June 2010) is illustrative of a wealth consumption investment that provides little if any real return. Its marginal utility is essentially zero, or even negative:

  • In a car-dependent city, sidewalks contribute little to urban mobility, except in central areas where pedestrian traffic is more frequent. Still, sidewalks have a limited impact on economic productivity. They cannot be considered wealth-producing investments, but as tools to improve convenience and aesthetics.
  • The above project does not improve in any visible way the utility of the sidewalk since the prior sidewalk did not appear to be defective in a way that would impair its use. The project was thus simply done in an opportunistic (American Recovery and Reinvestment Act) and discretionary manner.
  • Two wheelchair ramps were laid on each side of the disabled parking spot. Therefore, this project comes at the expense of an additional parking slot, implying reduced car accessibility for local businesses, as well as a small amount of green space lost to make place for a ramp.
  • During the construction phase, local businesses were disrupted by reduced accessibility, resulting in a loss of revenue.

Therefore, outside the labor and the materials that were used for construction, the capital invested in this project can be considered wasted. It is a perverse example of the “broken window fallacy” principle, particularly since, at the start, the “window was not broken”.