How much money does India lose due to traffic congestion?
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What are the type traffic congestions and who gets stuck in it?
- Regular
- central areas of big and small cities
- highways/toll
- small roads or alterante roads that people take to avoid traffic
- Irregular
- Accidents
- Blockage of Roads due to construction or other activities
- Crowd during Festivals casuing Traffic
First let me identify personas which are affected by the traffic congestions
- office commuters (morning and evening)
- school goers (morning and afternoon)
- shoppers/home makers (afternoon and weekends)
- tourists
- travelling business owners and employees
Out of all the above personas losses to office goer, travelling business owners and school goers is significant
Population of India ~ 1200 Million
Family size ~ 4 Members per family
Hence, There are 300 Million families
Assume equal distribution of people between 1 to 60 age
Hence, we get 20 Million in each age group
From age 6 to 22 people travel for education
17 * 20 Milllion * 0.25% = 85 Million travel
from age 22 to 60 people travel for work and shopping
40 * 20 Million * 3/8 work * 0.5% travel = 150 Million
40 * 20 Million * 1/8 shop * 0.5% travel = 50 Million
We get Total of
285 ~ 300 Million
Roughly 20% dont get stuck in traffic - short distance and time of travel / night shift etc
Hence we get rest 80% people who get stuck in traffic on regular basis
Total 240 Million
We will bucket these people by buckets based on minutes they get stuck in traffic
10 Minutes = 40% = 96 = 960 Milllion Minutes
20 Minutes = 30% = 72 = 1440 Milllion Minutes
30 Minutes = 15% = 36 = 1080 Milllion Minutes
60 Minutes = 10% = 24 = 1440 Milllion Minutes
120 Minutes = 5% = 12 = 1440 Milllion Minutes
Total 6360 Million minutes = 106 Million hrs per Day
Now we'll Calculate Loss to Indian Economy
Fuel 5% hrs = 106 * 10% = 5 Million hrs
Hourly fuel needed = 60 Rupees
= 300 Million
= .3 Billion Rupees
vehicle losses
240 mn * 0.05% = 0.12 mn * 1000
= 0.12 Billion Rupees
Total Real Loss = 0.3 + 0.12 = .44 Billion Rupees
Total Opportunity Loss
106 mn * (20% people may work) = 20 Million hrs * min wage 50 rs = 1 Billion Rupees
Public Property loss
= electicity + signals + traffic cops = 1 Billion Rupees Daily
Total Daily Loss
0.44 + 1 + 1 = 2.44 Billion Rupees
Annual Loss
2.44 * 365 = 890 Billion Rupees = $ 12 Billion
Known population and traffic of Mumbai. 20m population. 2000 km of roads. roughtly 1500 vehicles/km.. based on avg size.
Assume 3 people per vehicle. that is 3 x 1500 x 2000 = 9 mil people on road.
Assume this is 2 peak hours per day => 18m people hours on road per day.
Assume Rs 50 per hour then Rs 900m per day. or 200 days... Rs 180b/year.
Assume 10 equivalent size of Mumbai for Rest of India.. then Rs 1800 b/year = $25b per year.
Now need to add Child Care, Elder Care, Health issues care cost, accidents, psychological issues, productivity loss: equal to at least $25b.
Cost of incremental fuel.. assume Rs 60/liter. Mumbai case 2000km x 1500 vehicles/km x 2 hours = 6m km/ 20km/liter x rs 60 = Rs 18m/day in fuel. or Rs 18x200 days x 10 cities equal for India = Rs 36b round to $1b.
Cost of air pollution : $2b estimate.
Total cost $25b time cost + $25b health and other. $1b fuel and $2b air pollution ~ $50b/year.
Urban population - 30% -> contribution to overall India -> 50% GDP -> so adujstment 40%
Traveling during peak times when there is traffic congestion - 30% - Net-> 30% of 40% - 12%
Productivity loss of the population - 20% -> Net -> 20%*12% -> 2.4%
GDP of India -> 2600 Billiomn
Loss - 2.4% of 2600 Billion -> 62 Billion
As I am using GDP which automatically averages out contribution, I am not diving into personas and such
Not sure how this is a product question but I'd like to give my macroeconomic brain some work, so here's what I think:
What does traffic congestion cost:
- Delayed commutes (From the analogy of Time is Money, delayed commutes are lost manhours)
- Traffic congestion creates additional consumption of fuel.
- Traffic congestion creates more pollution, so more maintenance for the country.
Let's consider point 1 for now, and move ahead:
1. 36% of the Indian population have vehicles - 0.36*1.2 = 432 million people are prone to be a traffic jam.
Let's say 4 hours lost/week = 208 hours lost/year. Assuming profits generated by a single person in 1 hour is 50rupees (Avg salary of 4lakhs)
= 432,000,000 * 208 * 50 = 4492 billion rupees or 64 billion USD.
The same analysis can be done for the other 2 hypotheses.
Thoughts?
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