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Traffic jams are back, and it's not just cars

**Nairobi traffic jams are back; long live the Kenyan resilience.** [XN Iraki, Standard]

We can get used to everything. Why did we think high fuel prices are an exception?

Just after the price hit Sh211 per litre, I noted traffic drastically reduced in the city. It has slowly built back.

Last Friday, the usual jam was back. The Nairobi Expressway has lots of traffic. That was a great experiment for behaviourists, including behavioural economists.

This experiment has diffident facets. One is what price we can bear. Is that why some government officials suggested prices could keep rising? Is there a price when we would all leave our cars at home? A good simulation could give us that. At what price shall tax revenues from fuel start going down? PhD students, where are you?

The second facet is price elasticity of demand. How does the demand for fuel respond to price increases? The monthly increase and corresponding volume of fuel consumed can give us that elasticity. Can it be peculiar like our other Kenyan behaviours?

Kittel and Tanaka (in 2019) estimated the short-run price elasticity of Japanese gasoline demand to be -0.37, similar to the US estimates. This means that a 10 per cent rise in the price of gasoline (petrol) leads to a fall of 3.7 per cent in demand. You can explain why taxing fuel is popular with governments.

The Kenyan elasticity value could be less, meaning our demand is less responsive to price increases. Developed countries have alternatives like trains, buses or flights. Further, we have fewer cars per person compared with the USA or Japan.

Switching to alternative means of transport is not that pronounced. Some have already switched to the lowest alternative, walking.

The car owners have few alternatives beyond walking, buses or matatus. The convenience of the car is addictive. After using public means you realise the car was not that ‘expensive’. Selling a car is not that easy, waiting for the price to stabilise could be a better option.

The other reason why cars are back can be explained by the structure of the Kenyan economy. It’s about 80 per cent informal. That makes it easy to adjust prices. Even the formally employed have their hustle.

Own side hustles

In a recent study of my former students, I found while 80 per cent were formally employed, 65 per cent owned side hustles. Since the last shock rise in prices, we could have shifted money from side hustles to cars. Wages are sticky despite the rise in prices.

Cars can be brought back by reduced expenditure elsewhere, from the kitchen to leisure such as golf or eating out. We could turn to savings or borrowing.

There could be another reason why cars are back on the road. Kenya has reached a tipping point where cars are no longer a status symbol or luxury but a necessity, a tool to enable us to become more efficient and productive. Have we not invested so much in the road network, which has become an incentive to own cars?

The return of the cars demonstrates that human beings can adjust to anything. Why else do we live in slums? Why are we exploited by employers? Why do some wives and husbands live in abusive marriages?

This “get used to it“ can be misused by policymakers and leaders to keep people in their economic place. That is why the idea of upward mobility is so alluring.

Americans disliked the monarchy for that reason and set up a republic. That idea has endured espoused by the American dream. It’s spiced by the national lottery that brings new dreamers every year.

Upward mobility

How do we facilitate upward mobility? Education has been the sure root. It gives us new skills and choices, including shifting jobs or leaving the country to another.

The return of the cars despite price hikes shows the resilience of the Kenyan economy. But let’s be truthful, there are many who never returned their cars to the road. We should share a thought for them. There are likely job losses as firms adjust their costs.

As we celebrate the resilience of the Kenyan economy we must remember those who never own cars and resorted to walking, boda boda or took matatus. They are stakeholders in the Kenyan economy through consumption.

We have copied the Western social political system except for their welfare systems. Even the most advanced countries admit there shall always be disadvantaged members of society who should not be allowed to fall through the cracks.

After all, civilisation is not defined by how the countries pamper the few elites, but by how they take care of the vulnerable members of society. Return of traffic jams is not just about cars, they give us an insight into the structure of the Kenyan economy.

Is your car back on the road? Talk to us…