The London Tube Strike Actually Benefited The Economy

As Boris Johnson never tires of telling us, when the tube workers strike, they inconvenience people and cost the economy millions of pounds of lost income. But that may not actually be true. How strange for Boris. He's never normally wrong is he? Next they'll be telling us they got a bad deal for the Olympic Stadium.

A fascinating analysis of the London Tube strike in February 2014, by researchers from the Universities of Cambridge and Oxford, has found that they actually produced a net economic benefit, as a result of commuters being forced to experiment with a different route - and then finding that the new route was actually an improvement.

The researchers examined 20 days of anonymised Oyster card data, containing over 200 million data points, to observe how individual journeys were altered. As the 2014 strike was only partial, it enabled the research team to directly compare those affected to those not affected - and then to see whether people chose to return to their previous route in the following days, or whether they switched to their new one.

Amazingly one in 20 people found a better route and then stuck to it - with commuters who had previously traveled on one of the slower lines (for example, the District line) more likely to change. By then performing a cost-benefit analysis, researchers found that the amount of saved time, over the long term, outweighed the combined time lost by other commuters during the course of the one-day strike. The idea of 'forced' innovation, when people are nudged to change a routine that is actually sub-optimal, bringing long-term benefit, is known in economics as the Porter hypothesis.

Co-author Dr Ferninand Rauch, from Oxford’s Department of Economics, added: “One of the things we’re looking at is whether consumers usually make the best decision, but it’s never been empirically tested using a large consumer dataset such as this one. Our findings illustrate that people might get stuck with suboptimal decisions because they don’t experiment enough.”

Another co-author Dr Tim Willems, also from Oxford’s Department of Economics, said: “Given that a significant fraction of commuters on the London underground failed to find their optimal route until they were forced to experiment, perhaps we should not be too frustrated that we can’t always get what we want, or that others sometimes take decisions for us. If we behave anything like London commuters and experiment too little, hitting such constraints may very well be to our long-term advantage.” 

So, next time you're cursing the unions, just remember: they're actually doing us all a big favour. Shake their hand when you see them.

(Image: Rex)