Lessons in transportation economics

From the Seattle Times. First, what floats the boat;

...a classic old Washington state ferry has sold at auction for just 40 percent of market value.

The 48-car Rhododendron was sold this week via a state-sanctioned auction website for $300,000 to an entity named “Kingstontown.” KOMO-TV reports the market value had been placed at $750,000.

The market value is what something brings on the market. That is, it is the sale price.  No one places the market value--though many are called to estimate it, few choose to bid.  The reason the market value emerged as it did is contained in the story itself;

The Rhododendron was purchased by the state in 1952 ....the interior is in generally good condition after some restoration. However, state Rep. Judy Clibborn, who chairs the state House Transportation Committee, says the ferry would have been too expensive to restore to service.

So, the best alternative use turns out to be worth...what it brought at auction...for whatever purpose the buyer has in mind.

Then, we have a hidden externality of some not so closely watched trains;

While Sound Transit and Bellevue were negotiating an agreement on a future light-rail route, the transit agency didn't mention for several months that it was thinking about building a large maintenance and storage yard in the city.

That has angered City Council members, who learned only after signing an agreement last year that Sound Transit was studying Bellevue sites for a 20-acre-plus, $225 million rail yard.

....The 20- to 25-acre facility would be used to store, clean and maintain 80 train cars nightly, operators would report there for work, and offices would house dispatchers and other workers. Sound Transit's current maintenance yard — too small to handle a much larger fleet — is in Seattle's Sodo area.

Bellevue, east across Lake Washington from Seattle, was the most prominent suburb  to emerge in the area, post WWII, thanks to the widespread ownership of the automobile (and one of the infamous pontoon bridges the Pacific Northwest likes to build).

Autos have their externalities too, but they are easily handled by a Pigouvian tax (on their fuels, at the pump).  Public transit, not so much.  It consumes tax revenue rather than generates it.