The Economics of Squishing

On Tuesday morning we woke up early and headed to Shingiro. We attend the Shingiro staff meeting on Tuesdays, which starts at 7:30. After waking up at 7, I coughed down a breakfast of banana bread and a cup of coffee. Outside Elie, Amber, and Shingiro nurses Pascaline, Louisa, and Mary wait in the Land Cruiser. Ro sat up front. Zack got in to drive, and Consolate got in the back with us.

As we left the project house, there were seven of us in the back seat. This did not bode well for my comfort. Already I was confined to a small area of personal space and I knew that we would be picking up Jean D’Arc and Rene on the way. This would push me over the edge from ‘morning cranky’ to ‘full-blown-squashed-and-resentful’.

We picked up Jean D’Arc and then Rene. “Rene should sit up front with me” said Ro, “because, Elie – aren’t we picking up two more people?”

“Hehehe, maybe two, I think three though,” chortled Elie. This would push the number of us in back seat to 10 or 11.

I began to think about the economics of the squishing decision. Given a scarce resource – a ride to Shingiro – there should be some logic behind how it is distributed to the pool of potential users.

Scenario 1: Perfect World

Assumptions:

1. Riders have homogeneous preferences between cost and comfort
2. Riders are added until the trade-off between cost and comfort are equal (due to homogeneous preferences, this could be either for each person or total utility)
3. Once in the Land Cruiser, an individual cannot get out (once the decision is made to get in, social norms mean you can’t get out, but your original preferences stay intact)

Implications:

The alternatives to piling into the CCHIPs’ Land Cruiser are 1. taking a moto-taxi or 2. walking. A moto-taxi costs RWF 200. For simplicity, I will assume the cost of walking is equal to taking a moto-taxi, RWF 200.

As more riders enter the Land Cruiser, personal space is not impeded until there are 6 people in the back. At this point, the squishing and squeezing begins. Once 10 people are in the back of the Land Cruiser, all personal space is gone, the back is full, and on average most people would say that additional riders make the alternative – paying for a moto-taxi – a better option.

Thus, potential riders should stop wanting to get into the CCHIPs van at the same time that each of the current riders would prefer no one else get in – once there are already 10 people in the Land Cruiser. Lovely. Unfortunately, that’s not the way the story goes. Real world preferences are not homogenous. In this case, being a pampered American, I was far less willing than everyone else to squeeze.

We arrived at the turn-off of the main road for the bumpy, dirt road to Shingiro. Two more Shingiro nurses piled in. At this point we had 10 in the back of the Land Cruiser. Though everyone else seemed ok, I was definitely not happy.

Scenario 2: Social Utility Maximization under Heterogeneous Preferences

Assumptions:

1. Riders have heterogeneous preferences between cost and comfort
2. Riders are added until the marginal social benefit of an additional rider is negative (group utility is maximized)
3. Once in the Land Cruiser, an individual cannot get out

Implications:

In this scenario, my preferences are crankier than the group’s. My frustration builds much faster than everyone else. In fact, at 8 people I’m already indifferent to the unpleasantness of riding in the crowded Land Cruiser vs paying for a Moto-taxi. For me, each additional person adds a growing amount of pain and discomfort, which I translate into an increasing willingness to pay for the alternative. Conversely, the group only adds a set amount of pain for each person added.

The group seemed content with 10 people in the Land Cruiser, so I was willing to stay quiet. I’m a guest here, a volunteer. Because one of the assumptions is that I can’t get out, I was locked into my original, correct decision to ride the Land Cruiser.

However, as we cruised up the bumpy, rocky road to Shingiro, Zack stopped not once, not twice, but three more times to pick up more riders. This wasn’t just unpleasant for me – everyone seemed sort of cranky when we arrived.

Scenario 3: Personal Utility Maximization under Heterogeneous Preferences

Assumptions:

1. Riders have heterogeneous preferences between cost and comfort
2. Riders are added until the personal utility of an additional rider is negative
3. Once in the Land Cruiser, an individual cannot get out

Implications:

Here, even though everyone already riding in the back of the Land Cruiser is done adding people, the driver and potential additional riders hold the power to make the decision.

Because the additional riders (the "squishers") have a different preferences than the group – they are more willing to sacrifice on comfort – the utility of the group is not maximized (i.e. – on the whole the group is annoyed).

In fact, at 13 riders, the group average cost of riding (in discomfort) is RWF 350 vs the alternative RWF 200 for the moto taxi. Thus, the total loss is:

(RWF 350 - RWF 200) x 13 = RWF 1950

The driver, who also holds the power to make the decision, is not faced with the choice. He knows he can bank on the gratitude of the additional riders he picks up. Good manners and fairness mean that the resentment of the group will be muted or unexpressed. Unless one of them has a blog and a long memory.

Scenario 4: Reality

In reality, the Rwandans are pretty happy jamming as many people into a vehicle as possible. Without me, the “group preference” line above wouldn't cross the Moto-taxi line at RWF 200 until 14 or 16 people are in the back of the Land Cruiser.

In fact, at 13 people, my personal discomfort cost RWF 2100 (discomfort) - RWF 200 (alternative) = RWF 1900. That means that the other people, on average, only were about RWF 5 uncomfortable.

Sadly, while I was close to establishing that Zack is a jerk through economics, all I really proved is that I need to suck it up.

But, as this video proves, it was a little crazy.