Tuesday, October 18, 2011

Commuting Costs the Average Metro DC Family $28,670 Per Year!

(Disclaimer: yes, that's a rough estimate, but it's within the realm of reasonableness, as explained below.)

Photo source.

In the previous post, we learned that the average DC driver wastes 68 hours of his/her life in traffic jams each year. CarBuzz priced this loss at $1,555 per driver, though I suspect that this is a low estimate of the cost of traffic jams, for reasons that will be apparently below.

Nevertheless, traffic jams are expensive - but how much does commuting itself cost?

According to the infographic yesterday, the average city commute (one-way) is 12.8 miles, taking 33 minutes. The IRS estimates that the average total cost of ownership of driving a car is about $0.51 cents per mile. Finally, the average hourly wage in DC is $35.31 per hour. Given this data, we can come up with a rough estimate of what commuting costs the average DCer in time and money, if we assume that the average person drives to work 200 days each year. For this estimate, it also matters greatly how much you value your free time, so I'll do the calculation two different ways - valuing one's free time at the full average hourly wage (for people like me who value their free time highly and/or hate driving at all) and at half the average hourly wage (which several economic studies estimate is the value that most people place on their free time - half their hourly wage).

After adding the direct costs of driving, the cost of time wasted, and the extra costs of congestion, commuting costs the average DCer $14,335 in time and money every year (if they value their free time highly), or $9,251 if they value their free time at half their hourly wage. (I would upload my Excel sheet, but it's too ugly to put up on the web, and I don't feel like prettying it up.)

Of course, for a majority of families, both parents commute, so the cost per family of commuting in wasted time and money is $28,670 (or $18,502) per year.

That is a ton of money - $2,389 (or $1,541) per month. That's a big enough monthly payment to add about $375,000 (or $225,000) in principle to a 30 year mortgage! I know lots of people ostensibly live in the suburbs and have long commutes in order to save money on housing, but unless you severely undervalue your free time, you should be willing to spend a lot more in order to purchase a house close to where you work.

Alternatively, you should be willing to take a moderately steep paycut to work closer to where you live.

Yet, almost every morning, I hear on WAMU that it takes an hour to travel from the Beltway to downtown DC on I-395N .... I just don't get it .... If you're one of the people who do that every day, how do you avoid shooting yourself and/or the other drivers? I just couldn't handle it ....

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