A Lesson Regarding Causation, Correlation, and Costs in Education

Correlation: a relation existing between phenomena or things or between mathematical or statistical variables which tend to vary, be associated, or occur together in a way not expected on the basis of chance alone.  Causation: the act or process of causing; the act or agency which produces an effect.  Cost: the outlay or expenditure (as of effort or sacrifice) made to achieve an object-Merriam Webster Dictionary


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All Hail the Port Authority’s Alleged Cost Savings

For sure, the heading is a bit tongue in cheek. In the latest press announcement, the Port Authority says through management efficiencies it has cut another $10 million from the cost of the North Shore Connector, bringing the total cost reductions since last May to $24 million. The estimate of the final cost of the project is now placed at $528. Of course, that assumes no unexpected cost overruns on the remaining 30 percent of the project-a big assumption.

What the Port Authority assiduously avoids telling us is that the final cost is still nearly double the estimated cost. In February 2004, the price was said to be $363 million. But then they cut the convention center leg and other elements of the project. These cuts were said to save $80 million. Thus, the project cost should have been lowered to $280 million and that means the $528 million new final estimate is 89 percent above the original estimate of the project’s cost.

Moreover, by dropping the convention center leg of the Connector a large and disproportionate fraction of the putative benefits of the project were lost. The per rider cost for a round trip on the North Shore Connector over its first 20 years will be $45, assuming the ridership forecast is accurate. It would be cheaper to provide limo service from the North Side to Downtown.

And so it goes with this ill-conceived money wasting boondoggle.