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Pricing European Transport Systems: Recent Developments and Evidence from Case Studies
Abstract
This paper draws on the results of various projects undertaken by the European
Commission regarding transport pricing reform in Europe. It begins with an account of
current European policy and practice. It then considers the issue of measurement of
marginal social cost, the remaining controversies that surround it, and the barriers to its
implementation. Finally it draws on case studies to consider what would be the
implications for prices and levels of traffic on the various modes if marginal cost pricing
was implemented in practice.
... There is an extensive literature studying the marginal cost of using road infrastructure. This is motivated by the fact that an efficient and sustainable use of transport infrastructure presumes pricing its usage based on the marginal cost of road use (Nash and Sansom, 2001;Nash and Mathews, 2005;Link, 2014 However, the latter type of analysis considers productivity at the aggregate, industry sector level. Considering the large amounts of resources expended on road construction and maintenance, the empirical literature analysing bidding behaviour as a function of the bidding framework that is established in the Quote of Bids is relatively small. ...
... Although the idea of benchmarking efficiency has a long history in the academic literature in general, the availability of econometric methods gives renewed impetus to more advanced research (Nash, 2018) in the road sector. One example is Welde and Odeck (2011), who study the efficiency of 20 Norwegian toll companies in operation between 2003-2008 using data envelopment analysis (DEA) and stochastic frontier analysis (SFA). ...
The problem of slow productivity growth in the road construction (and wider construction) industry is well known. The present paper suggests a means for efficiency analysis in one part of this industry, namely road surface renewal in Sweden, built upon the application of Stochastic Frontier Analysis (SFA) techniques. The paper is novel in that it focuses on project level rather than firm or contractor level performance and takes the perspective of the inefficiency that may result from the way the contracts are specified by the highway agency’s pavement engineers (client side). We compare 233 renewal contracts tendered over a four-year period via the estimation of a cost frontier, with controls for heterogeneity between projects. Our results produce first estimates that expose substantive differences in the relative efficiency performance of different engineers within the Swedish highways procurement organisation (Trafikverket); with indicative savings of around €40 m out of a total road renewals budget in Sweden of €200 m. We also find substantial economies of scale that could, in principle, point to further cost savings if road renewal projects can be packaged up as larger projects. These client-side savings represent potentially important sources of savings in addition to those that can be achieved through the pressure of competitive tendering on the supplier side. The paper therefore illustrates how disaggregate analysis of project level information can readily be used for revealing important information about how best to frame the procurement process and thus deliver productivity and unit cost improvements over time.
... In the relevant literature, numerous mobility measures and best-practice examples on how employers can support sustainable mobility among their employees have been discussed (Dickinson et al., 2003;Heinen et al., 2008;Heinonen & Weber, 1998;Hamer, Kroes, & Van Ooststroom, 1991;Nash & Sansom, 2001;Root, 2001;OECD, 2002;Vanoutrive, Van Malderen, Jourquin, Thomas,, Verhetsel, & Witlox, 2009b;Vanoutrive, Van Malderen, Jourquin, Thomas, Verhetsel, & Witlox, 2009a;Vanoutrive et al., 2010;Vanoutrive et al., 2012). These measures can be categorized as follows: ...
... Various studies have shown that employers can assume an important role in affecting the commuting behavior of employees, and hence also in promoting sustainable transport modes (Dickinson et al., 2003;Enoch & Potter, 2003;Vanoutrive et al., 2010). The literature suggests a broad variety of employer-driven measures aimed at fostering sustainable mobility, such as subsidized public transport tickets, the provision of bike sheds or shuttle bus services (Dickinson et al., 2003;Heinen, E., van Wee, B., & Maat, 2008;Heinonen & Weber, 1998;Hamer et al., 1991;Nash & Sansom, 2001;Root, 2001;OECD, 2002;Vanoutrive et al., 2009bVanoutrive et al., , 2009aVanoutrive et al., , 2010Vanoutrive et al., , 2012. However, most of these studies have been conducted in the context of urban environments, largely ignoring the potential role of rural employers in promoting sustainable mobility among their employees. ...
In industrialized countries, mobility represents one of the most important sources of emissions. Most research on promoting sustainable, climate-friendly modes of transportation has focused on urban areas. Rural areas—although characterized by high dependency on individual car ownership and usage—have received less attention. This article explores the potential role of rural employers in supporting sustainable alternatives to commuting by (single-occupied) motorized vehicles among their employees. We conduct a collective case study that considers five employers located in Eastern Austria (Burgenland), drawing from multiple data sources including structured surveys, expert interviews, focus groups, and site visits. Our analysis shows that employers have little incentive to implement measures that foster sustainable mobility among their employees. On the one hand, the costs accruing to employers for implementing such measures tend to exceed the corresponding benefits by a significant margin (unlike in urban areas where significant cost reductions can arise for employers). On the other hand, also employees generally exhibit little demand for such measures. We conclude that both from a societal and a business perspective, it is not efficient to promote sustainable mobility in rural areas via employers.
... .De Palma, Lindsey, and Proost (2006);Nash and Sansom (2001);Bonsall and others (2007). ...
... More profoundly, the companies, the profits of which are changed by traffic service, may have more freedom to purchase and trade travel time derivatives, which should be further estimated. The sum of all related profit and costs add to the potential for travel time derivative markets, [21] and [22]. More recently, According to [23], Transportation plays an important role in the U.S. economy and contributed 8% to U.S. Gross Domestic Product (GDP) in 2020. ...
Travel time derivatives are introduced as financial derivatives based on road travel times - a non-tradable underlying asset. In the transportation area, it is proposed as a more fundamental approach to value pricing because it conduct road pricing based on not only level but also volatility of travel time; in the financial market, it is propose as an innovative hedging instrument against market risk, especially after the recent stress of crypto market and traditional banking sector. The paper addresses (a) the motivation for introducing such derivatives (that is, the demand for hedging), (b) the potential market, and (c) the product design and pricing schemes. Pricing schemes are designed based on the travel time data captured by real time sensors, which are modeled as Ornstein - Uhlenbeck processes and more generally, continuous time auto regression moving average (CARMA) models. The calibration of such model is conducted via a hidden factor model, which described the dynamics of travel time processes. The risk neutral pricing principle is used to generate the derivative price, with reasonably designed procedures to identify the market value of risk.
... At the same time, they play an important role in determining the competitiveness of new railway lines (Sánchez-Borràs et al. 2010). 4 It is therefore not surprising that access charges in railway economics have drawn significant interest at the theoretical level (Dodgson 1994;Bassanini and Poulet 2000;Nash and Sansom 2001;Quinet 2003;Link 2004;Erhan and Robert 2005). ...
... Nash and Sansom [44] in a study compared the social costs of road and rail transport with current user charges in Europe. The purpose of the study was to investigate the pricing and performance policies in the European countries and measuring marginal and social related costs and related issues and obstacles to its implementation. ...
This paper presents a detailed comparative review of cost models and cost factors published in a number of studies on freight transportation. It attempts to determine and categorise cost factors from a different point of views in the reviewed studies which include cost factors (operational costs, value of time and external costs), study area (Europe, the United States, North America and Asia) and cost models (activity-based costing (ABC), statistical models, surveys, data mining, GIS, meta-analysis and Mathematical models). The results are assessed by comparison with the reviewed studies. The paper also proposed two model structures; (1) Road freight transportation costs (2) Road freight transportation cost estimating methods and data gathering. These models are designed to identify any gaps between the types of cost or any inconsistencies in cost factors and consist of an overall structure and multiple substructures.
... Nash and Sansom [44] in a study compared the social costs of road and rail transport with current user charges in Europe. The purpose of the study was to investigate the pricing and performance policies in the European countries and measuring marginal and social related costs and related issues and obstacles to its implementation. ...
This paper presents a detailed comparative review of cost models and cost factors published in a number of studies on freight transportation. It attempts to determine and categorise cost factors from a different point of views in the reviewed studies which include cost factors (operational costs, value of time and external costs), study area (Europe, the United States, North America and Asia) and cost models (activity-based costing (ABC), statistical models, surveys, data mining, GIS, meta-analysis and Mathematical models). The results are assessed by comparison with the reviewed studies. The paper also proposed two model structures; (1) Road freight transportation costs and (2) Road freight transportation cost estimating methods and data gathering. These models are designed to identify any gaps between the types of cost or any inconsistencies in cost factors and consist of an overall structure and multiple substructures.
... Departure from short-run marginal cost pricing is inescapable, particularly in the new context of private participation and the need to cover their operating and investment costs. Assuming a benevolent government (or an independent public agency dealing with transport infrastructure) it could be possible to minimize the efficiency losses of departing from marginal cost pricing fulfilling the budget constraint at an aggregate level (Nash and Sansom, 2001). The practical difficulties with this approach are evident in a world of private participated airports of different nationalities competing among themselves or with other modes of transport (particularly in the case of high speed rail). ...
... En mängd studier har genomförts inom ämnet trängselskatter (Attard & Ison 2010;Börjesson et al. 2012;Eliasson & Mattsson 2001;Fielding 1995;Han 2010;Larsen 1995;Nash & Sansom 2001). Det har även gjorts en del forskning där miljöaspekter beaktats i samband med trängselskatter (exempelvis Hultkrantz & Liu 2012;Johansson et al. 2009). ...
... After the pioneer task of Pigou (1920), writers such as Walters (1961) and Vickrey (1963) established the bases to fix an optimal tax for the use of infrastructure in accordance with the costs of congestion. Recently, this idea has gained force in multiple theoretical and empirical reports: Newbery (1990), Hau (2005a, b), Small (1992), Small and Gomez-Ibáñez (1998), Nash et al. (2000), Nash and Sansom (2001), and DeBorger and Proost (2001) among others; today, it is the policy established by the European Commission (1995,1998,2001). Thus, congestion pricing has gained great importance as an effective tool for traffic management to achieve several objectives, such as reducing emissions and promoting improvements in public transport (Yang and Zhang 2002;TfL 2005). ...
The mobility management tool proposed in this paper estimates the percentage of road space that should be reallocated from private vehicles to public transport according to internalization of the congestion externality generated by private vehicles. This reallocation measure could be implemented on a strategic mobility corridor in the city. The initial increase in trip time that a private vehicle experiences because of the reduction of its road space favors an improvement in mobility. This improved scenario is characterized by a more efficient reassignment of the traffic of private vehicles in the network, a modal change toward public transport, and better trip times in public transport. This tool could achieve a better social welfare compared to an uncontrolled user equilibrium condition. It could have, under specific circumstances, similar results to those by road pricing regarding the discouragement of the travel demand of automobiles and a greater acceptance on behalf of citizens and local administrations. DOI: 10.1061/(ASCE)UP.1943-5444.0000070. (C) 2011 American Society of Civil Engineers.
... Its cost effectiveness however would be dubious and most importantly, the transparency of such a system would be at least arguable, as drivers would not know the congestion charge they would be required to pay before starting their journey. Marginal cost pricing would require highly differentiated pricing systems in time and space, which would be expensive to provide and confusing to users (Nash and Sansom, 2001). Since marginal cost pricing is not very practical, transport economists have lately devoted their efforts to the study of second best alternatives (May et al, 2002; Verhoef, 2002; Shepherd and Sumalee, 2004; Zhang and Yang, 2004) and policy makers have opted for simpler, less expensive and more practical and transparent options such as cordon tolls and area licensing schemes. ...
... It could be possible to introduce second-best pricing that minimizes efficiency losses. The idea is to deviate from marginal cost fulfilling the budget constraint at a firm level (see Johansson and B. Kriström, 2012) or at an aggregate level (Nash and Samson, 2001). The practical difficulties of this proposal seem obvious when infrastructure such as airports, roads, ports and railways not only compete within a nation but also in a supranational dimension. ...
Infrastructure investment is an inter-temporal decision through which society foregoes its current wellbeing for the future. In the economic assessment of this trade-off, the practical standard method is cost-benefit analysis, which compares the social benefits and costs of the decision. Furthermore, a sound exercise of economic evaluation requires an approach that incorporates other unavoidable trade-offs related to pricing, such as charging short-run vs long-run marginal cost or the consequences of budget constraints on the net social value of the investment; intermodal competition and public investment; institutional design and the choice of contracts; and in a particularly important but somewhat neglected point, the long-term consequences of investment decisions. This paper addresses the economic content of this set of essential trade-offs and discusses their inclusion in the economic evaluation of major projects.
... Efforts to understand market development drivers have been principally focused on: (1) considering the economics of intermodal freight transport (cfr. Blauwens et al., 2006;Janic, 2007;Nash and Sansom, 2001;Panayides, 2002) (2) transport chain choice based on behavioural attributes (cfr. Bergantino and Bolis, 2008;Brooks and Trifts 2008;Daniels and Marcucci, 2007;Hensher and Golob, 1999;de Jong and Ben-Akiva, 2007;Paixão and Marlow, 2005;Puckett and Hensher, 2008), (3) policy strategies and measures to improve the supply side of intermodal freight transport (cfr. ...
Greater uptake of intermodal transport is important in improving efficiency and reducing carbon and other emissions. An alternative conceptual model to predict the potential of intermodal freight transport is offered based on flow game theory. Emphasis is placed on predicting the potential of establishing modal and operator alliances. The model is compared to case studies reported in literature and was shown to be able to interpret and predict operator strategies and best practices. The paper reframes understanding of intermodal transport developments and provides insight to shippers, operators and policymakers alike.
... The income surplus resulting from new transport taxes imposition across the EU will be targeted to improve the transport infrastructure, reducing negative environmental impacts and improving the European rail transport (Nash C., Sansom T., 2001). In 2001, was published a Transport White Paper, which provided the main action objectives and directions still by 2010. ...
The paper is focused on the global crisis' impact on the European transports. The analysis is based on the latest official documents and books and it is supported by statistical tables and pertinent diagrams. The transports' situation is followed by an analysis of the policies able to support the development of the European transports. A distinct part of the paper analyses the transport trends in Romania, the latest member of the European Union, in order to observe if the adhering to the European Union was/or was not positive for the Romanian transport. The main conclusion of the analysis is not a positive one, because the EU27 is not able to implement policies to support the transports' development and to face the crisis' challenges.
... Given the high proportion of fixed costs associated to the HSR option, the decision of charging according to short-term marginal cost or, on the contrary, something closer to average cost could radically change the volume of demand for railway in the forecasted modal split, and this unavoidable fact has obviously a profound effect on the expected net benefit of the whole investment. Although pricing is crucial for the understanding of this public intervention, it will not be covered in this paper (for a discussion of optimal pricing in railways see Nash, 2001Nash, , 2003and Rothengatter, 2003). We will assume here that government charges prices equal to short-run marginal social costs. ...
This paper deals with public investment in High Speed Rail (HSR) infrastructure and tries to understand the economic rationale for allocating public money to the construction of new HSR lines. The exam of data on costs and demand shows that the case for investing in HSR requires several conditions to be met: an ex ante high volume of traffic in the corridor where the new line is built, significant time savings, high average willingness to pay of potential users, the release of capacity in the conventional rail network and airports. On the contrary, net environmental benefits seem to be insignificant as to influence the social desirability of HSR investment. This paper discusses, within a cost-benefit analysis framework, under which conditions the expected benefits could justify the investment in HSR projects.
The most recent working paper version is available for download: Working Paper 2011-12, FEDEA.
... (Observera att negativa externa effekter förorsakas vanligtvis inte av hamnarna utan av de företag och personer som använder hamnarna.) Att det görs undantag för hamnar och flygplatser beror möjligtvis på att det länge har varit ett problem att statsstöd leder till orättvisa konkurrensfördelar, (Nash, 2001). Dessutom anses full kostnadstäckning vara nödvändig för att säkerställa en sund internationell konkurrens och för att förhindra att länder överinvesterar med syfte att föra över transporter från grannländerna. ...
... Optimal road pricing can be viewed as the application of a corrective or Pigouvian tax (Pigou,1920, Vickrey,1955, 1969, Walters, 1961) that seeks to internalise the costs of the negative externality via a marginal social cost principle. However, marginal social cost pricing of road use externalities has been considered by many to be impractical to determine and implement, and when it manifests as a spot price applying in a person-place-time specific form it has been criticized on the grounds that road users need to know what to pay before the journey, Nash and Sansom (2001). The ADEPT (Automatic Debiting and Electronic Payment for Transport) project, which conducted a field study in Cambridge over a period of three years from October 1992, is such an example of spot pricing (Blythe, 1993, andHills, 1994). ...
... Supposons Malgré certaines contradictions, la Commission semble favoriser une tarification au coût marginal à court terme (Commission Européenne, 1995, 1998, Nash, 2001). On s'attend que la tarification au coût marginal permette de récupérer intégralement le coût en capital, étant donné que les tarifs pratiqués sur les corridors encombrés et l'internalisation de la congestion et des effets externes produiront des recettes suffisantes pour faire face aux contraintes financières, tout au moins globalement pour tous les modes. ...
La répartition du trafic entre les différents modes de transport résulte des décisions prises par les usagers des transports, lesquelles dépendent du coût généralisé des déplacements que supposent les différentes solutions possibles. L’investissement dans le train à grande vitesse (TGV) est une décision qui relève des pouvoirs publics et produit des effets notables sur le coût généralisé du transport ferroviaire ; il influe par conséquent aussi sur le partage modal dans les corridors où des opérateurs privés rivalisent pour circuler et pratiquent des prix proches du coût total de production (infrastructures comprises).
... Marginal congestion and environmental costs vary with time of the day, area, vehicle type, and in the case of environmental costs, with weather conditions, engine type and fuel type. In addition to the difficulty of computing marginal costs (Fullerton and West, 1999), marginal cost pricing would require highly differentiated pricing systems in time and space, which would be expensive to provide and confusing to users (Nash and Sansom, 2001). The purpose of this paper is not to compute the marginal external costs of road transport but practical second best congestion and environmental tolls instead. ...
In this paper the environmental benefits and changes in social surplus from second best congestion tolls in eight English towns are estimated and compared with those from second best environmental tolls. Single and double cordon tolls are simulated using the SATURN model (Simulation and Assignment of Traffic to Urban Road Networks), with associated software to simulate the changes in traffic patterns resulting from cordon tolls. With these results the second best environmental and congestion tolls are computed. Changes in vehicle emissions are estimated and reduction in health and global warming costs computed. It is found that whereas any toll designed to reduce traffic congestion would yield positive environmental benefits not any toll designed to reduce environmental costs would yield positive benefits in social surplus. Double cordons yield higher absolute benefits than single ones, but the ratio of environmental benefits to other transport benefits stays roughly constant and is quite small. It is concluded that altogether more efficient results may be obtained by introducing a congestion toll than by introducing an environmental one. Key words Congestion tolls, traffic congestion, environmental externalities, emissions, emission costs, transport externalities, transport emissions, environmental costs 2 JEL classification
... Marginal cost pricing of infrastructure wear and tear is of great importance from an economic efficiency standpoint. Over the last decade, research on the subject has gradually increased for all modes of transport (Nash and Sansom, 2001; Nash, 2003; Thomas et al., 2003; Nash and Matthews, 2005;). One of the reasons for the renewed interest in the marginal cost of rail infrastructure costs has been the move in European railways towards vertical separation of rail infrastructure from train operations, driven by successive European legislation. ...
Economic theory advocates marginal cost pricing for efficient utilisation of transport infrastructure. A growing body of literature has emerged on the issue of marginal infrastructure wear and tear costs, but the majority of the work is focused on costs for infrastructure maintenance. Railway track renewals are a substantial part of an infrastructure manager's budget, but in disaggregated statistical analyses, they cause problems for traditional regression models since there is a piling up of values of the dependent variable at zero. Previous econometric work has sought to circumvent the problem by aggregation in some way. In this paper we work with disaggregate (track-section) data, including the zero observations, but apply censored and sample selection regression models to overcome the bias that would result from estimation using OLS. We derive track renewal cost elasticities with respect to traffic volumes and in turn marginal renewal costs using Swedish railway renewal data over the period 1999 to 2009. Our paper is the first paper in the literature that we are aware of to report usage elasticities specifically for renewal costs and therefore adds important new evidence to the previous literature where there is a paucity of studies on renewals and considerable uncertainty over the effects of rail traffic on renewal costs. In the Swedish context, we find that the inclusion of marginal track renewal costs in the track access pricing regime, which currently only reflects marginal maintenance costs, would add substantially to the existing track access charge.
... Its cost effectiveness, however, would be dubious and, most importantly, the transparency of such a system would be at least arguable, as drivers would not know the congestion charge they would be required to pay before starting their journey. 2 Marginal cost pricing would require highly differentiated pricing systems in time and space, which would be expensive to provide and confusing to users (Nash and Sansom, 2001). ...
Cordon tolls are simulated for eight English towns. The distributional effects and environmental impacts are assessed. Although distributional effects vary across towns, environmental impacts are positive in all cases. Benefits are compared to those that would accrue from first-best charges. It is concluded that cordon tolls perform relatively well. © 2004 LSE and the University of Bath
This paper uses econometric methods to study the cost efficiency of road maintenance provision in Sweden for the first time. The novelty lies in the application of econometric techniques to a new and rich panel dataset (73 contracts; 11 years, 2004–2014) with a wide range of variables and approaches to controlling for heterogeneity (including weather variation). The analysis is applied in the context of a sector where all road maintenance contracts are subject to competitive tendering, but with a state-run provider competing against private firms. The key focus is whether, even after competitive tendering, efficiency differences remain between the state provider and private entrants. We find that the state-run provider has significantly higher costs (between 8 and 20%) than private firms despite holding 60% of the market. The results suggest that substantial savings are possible through opening up road maintenance to the private sector through competition for the market; but that in Sweden, the tendering process is still not working optimally. Further research is needed to understand why the current cost gap persists between public and private providers, despite competitive tendering having been present across the whole market for several years.
L’objectif de cette étude est de réaliser une revue de la littérature sur les effets qu’il faut attendre de la mise en oeuvre d’une mesure de gratuité généralisée des transports en commun sur la pression automobile dans l’agglomération parisienne. Pour répondre à cette question, nous avons croisé les regards que l’économie et la sociologie ont pu porter sur le sujet. Nous avons commencé par revenir sur les raisons pour lesquelles il est important d’inciter à l’utilisation des transports en commun. Premièrement, nous soulignons l’importance de réduire la pression automobile dans les villes en discutant les principales externalités qu’elle génère. Deuxièmement, nous présentons l’incidence de l’utilisation des transports en commun sur ces externalités. Nous mettons en évidence que l’utilisation des transports en commun réduit la congestion et la pollution de l’air, augmente l’activité économique et peut atténuer les décalages spatiaux. Nous avons ensuite réalisé une méta-analyse de la littérature traitant de la gratuité des transports en commun. Nous avons listé, de manière systématique, les articles sur le sujet, ce qui nous a permis d’identifier quelques 478 articles. Parmi ces articles, seuls 10 articles scientifiques traitent de la gratuité totale et 17 de la gratuité partielle. Cette démarche nous a aussi permis d’identifier 23 rapports (non-scientifiques) sur les politiques de tarification des transports que nous avons classés comme de la littérature « grise ». Ces travaux sont essentiellement mobilisés pour la dernière partie du rapport, afin rendre compte des effets observés des expériences de gratuité menées dans d’autres villes à travers le monde. Le principal enseignement de cette méta-analyse est l’absence de cadre de réflexion cohérent et unifié sur cette question. Nous sommes donc revenus sur les enseignements qui découlent des théories établies de l’économie des transports. Cette littérature ne traite généralement pas directement de la question de la gratuité des transports, mais permet d’étudier les effets d’une telle politique dans un cadre d’analyse cohérent et bien établi.
In this paper, renewal costs for railway tracks are investigated using survival analysis. The purpose is to derive the effect from increased traffic volumes on rail renewal cycle lengths and to calculate associated marginal costs. A flow sample of censored data containing almost 1300 observations on the Swedish main railway network is used. We specify Weibull regression models, and estimate deterioration elasticities for total tonnage as well as for passenger and freight tonnages separately. Marginal costs are calculated as a change in present values of renewal costs from premature renewal following increased traffic volumes. The marginal cost for total tonnage is estimated to approximately SEK 0.002 per gross ton kilometre.
This paper is concerned with assessing the impact of vehicle taxes on vehicle ownership rates. As the debate on the appropriate levels of transport pricing has progressed, the primary concern has been to identify the externalities associated with transport and to assess their magnitude. Less visible in this literature has been an analysis of the degree to which vehicle taxes (the presumed method of internalizing transport externalities) actually impact transportation demand. The current paper assesses the degree to which current levels of vehicle taxes, which vary by country, actually impact car ownership. This study found a clear and significant relationship between vehicle taxes and levels of car ownership in a sample of 17 countries, including 15 European countries, the United States, and Japan. While the results imply that vehicle taxes can be used as an effective tool to moderate car ownership, the impact on actual vehicle miles driven would require a more detailed analysis. © (2005) by the Transportation Research Forum All rights reserved.
For many academic and professional transportation engineers, the concept of congestion pricing has become the paradigm of efficiency regarding the use of scarce road infrastructure and implementing dissuasive measures to deter excessive car use. While road pricing can be considered, in many cases, as a good traffic management tool it also involves a number of risks and overexpectations that are important to consider when designing, implementing and managing an efficient road pricing scheme. This work presents a series of records, many of them based on specialized literature and empirical evidence, that help to describe the potential risks and possible overexpectations that can come into play in a congestion pricing policy. Such information can be of great help in order to promote the correct implementation of traffic management policy.
We develop and implement a methodology to estimate price elasticities for highway transport by cars and by trucks. We use high frequency (daily) time series data on the number of vehicles passing through toll stations in Slovenia. Using high frequency data enhances estimation of price elasticities in two ways: first, the power of hypothesis tests increases with the number of observations and second, temporal microstructure of demand for highway transport can be analyzed. A dynamic ARMA model is applied to estimate toll and fuel price elasticities. Care is taken to eliminate double seasonality in the sample: the volume of traffic depends on the day of the week and the month of the year. Results show that (i) most of the estimated toll price elasticities are statistically insignificant, (ii) statistically significant toll price elasticities have the signs that are predicted by economic theory, and (iii) the highway system in Slovenia could be self-financing to a much larger extent than it is now.
Para muchos académicos y profesionales de la ingeniería de transporte, el concepto de tarificación por congestión se ha transformado en el paradigma de la eficiencia en el uso de la escasa infraestructura vial y del desincentivo al uso excesivo del automóvil. Si bien la tarificación vial puede ser, en varios casos, una buena herramienta de gestión de tráfico, comporta también una serie de riesgos y sobreexpectativas que es importante tener en consideración a la hora de diseñar, implementar y administrar un eficiente esquema de tarificación vial. En este trabajo presentamos una serie de antecedentes, basados muchos de ellos en la literatura especializada y en evidencia empírica, que permiten describir los riesgos potenciales y eventuales sobreexpectativas que enfrenta una política de tarificación por congestión, lo que puede ser de gran ayuda para impulsar una correcta implementación de esta política de gestión de tráfico.
Using pricing or fees can to a very large extent be compared to infrastructure investment because both change the costs of transport between two locations. These effects can be of considerable size and it is thus important to know what the effects are and where they occur. Most of the literature on HVF is concerned with the practical implementation of a HVF, the degree of optimal pricing of a proposed HVF and the traffic impacts. This is interesting because a vast amount of literature exists investigating the relationship between transport and land-use as well as the relationship between infrastructure investment and (regional) economic impacts. This paper aims at describing and comparing a number of studies of the relationship between heavy vehicle fees (HVF) and the economy. Three different types of models used to assess economic impacts are described: system dynamic models (SDM), spatial general equilibrium models (SCGE) and input output models (I/O); also various combinations of these model types can be applied. The general description of these different models types is supplemented with three case studies using I/O and SCGE models on HVFs in Germany, Denmark and Norway. The results from these case studies show similarities in the types and size of the results. Especially the price effects and employment effects are similar in all case studies.
This paper reveals the quality and type of market entry problems and the types of market entry strategies onto the rail freight transport markets in the EU, and in Hungary, in particular. Significant market entry problems in the EU are inadequate investments, bureaucracy, and unfavourable settings of market structure. Empirical examination shows that but extensive Mergers and acquisitions (M&A) activity and the cumulative negative effects may set competition itself to be a market entry barrier. These quality problems are of system dynamical by nature, related to efficiency of market regulations. Vertical integration is the most used market entry strategy in Hungary.
The economic environment changes quickly and is very difficult to find pertinent trends for the next few years. This is why, we tried to realise an overview on the EU economy and to forecast its evolution. It is the main objective of this research. The uncertainty generated by the current situation is high and the risks of weakening economic outlook remains very current for EU27. The risks connected to the growth prospects are real. Some of these risks, such as financial crisis and lower world growth rate have already materialized and have been included in forecasts. On the other hand, new risks have emerged and affect the growth prospects in EU27.
The financial crisis that has not been exceeded may still have great side effects on other market segments and on the real economy. This crisis can generate a stronger and harmful feedback than currently expected.
The inflation risks appear more balanced. The economic activity may suffer constraints of price increases higher than currently envisaged. A stronger than expected recovery in the global economic growth or the tensions increase in the oil-exporting countries could lead to stronger inflationary pressures. Moreover, the long-term measures regarding the economic recovery, based on liquidity and exceptional liquidity, could ultimately lead to a stronger than expected growth in the consumer prices.
The crisis is far away from being solved and EU27 is not able to manage a more realistic economic recovery plan.
Changes in the discipline of transport economics in Europe have implications for different modes, topics, and agents within the field. This article presents some of the most important changes, with a focus on the situation within the European Union (EU). The EU offers a coherent institutional basis for presenting some important regulations toward liberalization, in this case, those that are part of so-called European Common Transport Policy. The selection of the topics has depended largely on the interest and expertise of the author; obviously, other important topics developed by experts from individual countries or even transport authorities within their boundaries could expand the discussion.
On February 17, 2003, the London Congestion Charging Scheme came into effect. Preliminary results show a significant response to the £5 (U.S. $8) charge. Congestion over the first year decreased by 30%. Overall traffic levels within the charging zone fell by 16%. Speeds for car travel increased by more than 20%, and bus travel became more reliable. Elasticities of demand for trips by car with respect to generalized costs are estimated to be between –1.32 and –2.10. The average marginal congestion cost within the central zone is estimated at £1.65/vehicle-km (approximatelyU.S. $2.58/vehicle-km). The net economic benefits of the Scheme for the first year were £50 million (U.S. $78 million) and the net revenues, £68 million (U.S. $106 million). Net revenues are mainly being used to improve public transport.
Abstract This paper aimsat describing and comparing,a number of studies of the relationship between heavy vehicle fees (HVF) and the economy. Most of the literature on HVF is concerned with the practical implementation of a HVF and the degree of optimal pricing of a proposed HVF. This is interesting because there exists a vastamount,of literature investigating the relation- ship between transport and land-use as well as the relationship between infrastructure invest- ment and (regional) economic impacts. Using pricing or fees can to a very large extent be compared to infrastructure investment because both change the costs of transport between two locations. An analysis of the German HVF concerns several issues with economicimpacts being one of them. There are someinteresting features in both the German and the Swiss HVF related to the use of the revenues. The analysis should concern both the direct (the effect stemming from imposing the fees on the economy without accounting for the use of revenues) and the indirect effect stemming fromthe use of the revenues.In both Germany and Switzerland the fees are supposed to be used for infrastructure investment. This may give completely different results fromthe effects arising frome.g. lowering income taxes.
Economic theory advocates marginal cost pricing for efficient utilisation of transport infrastructure. A growing body of literature has emerged on the issue of rail marginal infrastructure wear and tear costs, but the majority of the work is focused on costs for infrastructure maintenance. Railway track renewals are a substantial part of an infrastructure manager’s budget, but in disaggregated statistical analyses they cause problems for traditional regression models since there is a piling up of values of the dependent variable at zero. Previous econometric work has sought to circumvent the problem by aggregation in some way. In this paper we instead apply corner solution models to disaggregate (track-section) data, including the zero observations. We derive track renewal cost elasticities with respect to traffic volumes and in turn marginal renewal costs using Swedish railway renewal data over the period 1999–2009. This paper is the first attempt in the literature to apply corner solution models, and in particular the two-part model, to disaggregate renewal cost data in railways. It is also the first paper that we are aware of to report usage elasticities specifically for renewal costs and therefore adds important new evidence to the previous literature where there is a paucity of studies on renewals and considerable uncertainty over the effects of rail traffic on renewal costs. In the Swedish context, we find that the inclusion of marginal track renewal costs in the track access pricing regime, which currently only reflects marginal maintenance costs, would add substantially to the existing track access charge. EU legislation requires that access charges reflect the ‘costs directly incurred as a result of operating the train service’, which should include a marginal renewal cost component. This change would also increase the cost recovery ratio of the Swedish infrastructure manager, thus meeting a policy objective of the national government.
We construct a political economy model to analyze the political acceptability of road pricing policies. We use a citizen-candidate framework with a population composed by three groups differing for their income level. We show that road pricing policies are never applied when there is no redistribution of the resources in favour of other modes of transport or when the congestion of these types of transport is relatively high. The results suggest that the efficiency of the redistribution of resources from road to the alternative types of transport as well as the fraction of the population that uses the road transport are key factors in explaining the adoption of road pricing schemes.
The magnitude of the social and environmental costs owed to transport in the European Union (EU) has shown the urgent need to introduce measures for the internalization of externalities and to advance, this way, towards a more efficient transport system. The growing development of the theory of externalities and the most efficient instruments for its internalization have contributed to the introduction of road transport charges in some countries like Switzerland, Austria or Germany. In spite of this, the infrastructure pricing seems insufficient to cut off urgent environmental problems such as climate change and the depletion of natural resources. Taking the limitations of the conventional transport policy as a starting point, this article aims to advance an operative definition of the concept of sustainable mobility, and to set a framework capable of assuring that sustainable mobility becomes a useful and efficient tool for transport policy in the 21st century. In this context, instruments that traditionally were out of transport policy, such as land use or urban planning, acquire great importance. The Basque Country, a region in the western Pyrenees Mountains that spans the border between France and Spain, will be used as an example because of sharing with many regions of the EU similar transport and environmental problems.
This article deals with modelling congestion charges at an airport. In this context, congestion charging represents internalizing the cost of marginal delays that a flight imposes on other flights due to congestion. The modelling includes estimating congestion and flight delays, the cost of these delays and the efficiency of particular flights following the introduction of a congestion charge. The models are applied to an airport – New York LaGuardia – to illustrate their ability to handle more realistic congestion scenarios as well as the nature of the congestion to be charged, the effectiveness of the congestion charge and a sensitivity analysis based on changes in the nature of congestion as well as characteristics of demand in terms of flight-aircraft type and airport capacity.
All networks for the transportation of people, commodities, goods, information and services, both traditional (infrastructure), and innovative ("infostructure") that embody and develop technology, that are capable of evolving and at the same time of integrating and creating new markets, of promoting competition and increasing the productivity of the inputs, all of these networks are complementary with one another and are all necessary for enhancing competitiveness. Given the current economic cycle in the Euro Area - characterized by relatively slow growth - and the scarcity of public financial resources, investment programs must be such as to offer the best mix of infrastructure, infostructure and investments in R&D. With reference to traditional infrastructure, not all projects are equally useful for the economic development. A precise order of priority of the investment options needs to be defined so that, in allocating the resources, priority is given to: i) works aimed at creating complex and high "value added" systems, characterized by high medium term economic and social prof itability; ii) works that are integrated in contexts of intermodal mobility; iii) works that are liable to promote the use of Public-Private Partnership instruments (PPP), or project finance instruments. In order to rate public projects and to make the best choice, it is of fundamental importance to carry out, besides the traditional financial analysis, a Cost-Benefit Analysis (CBA). These methodologies, together with the PPP, lead to the programming and implementation of projects characterized by broad user basins (and hence also significant cash flows, like the transport systems between and within large metropolitan areas), controlling timelines and costs and triggering additional private resources. The European experience shows that this approach is feasible. In our Country it is necessary to create the conditions, especially at the regulatory level, conducive to making the best use of these instruments. Against this background the experience of the Lyon-Turin railway link demands that the "Legge Obiettivo" ("Objective Law", the new legislative framework introduced in Italy in 2001 to establish a fast-track system for the realization of public works defined to be "strategic and of major national interest") be revisited, also from the standpoint of favouring an involvement "ex ante" of the local governments and communities. This should contribute to overcoming the "crossfire of vetoes" by the various stakeholders that often translates into "ex post" financial compensation, with the ensuing uncontrolled delays and cost overruns.
Railroads have provided exciting stories of planning and construction. There has been difficult terrain, dangerous animals, populations opposed to the coming of outsiders, the management of huge workforces, and the raising of huge sums with inflated promises of profit. Recent cases feature sophisticated and competing analysis of costs and benefits, groups concerned with protecting the environment, as well as suspicious populations empowered by democratic provisions for access, mass media, and advocacy groups. The railroad to Jerusalem illustrates both the historic and contemporary sides of these stories. Planning for a new line and the upgrading of the existing line have run into the modern complications of sophisticated economic analyses, demands from localities along competing routes, the conflicting interests of politicians and administrative entities, environmental activists, and considerations of international relations.
The use of fossil fuels in transportation is an important topic as a result of growing concerns over global warming. Automobile petrol demand has been of particular interest to researchers and policy-makers, given that the automobile is a major contributor to the enhanced greenhouse effect. This paper forecasts Australia's automobile petrol demand up to the year 2020 based on the best performing forecasting model selected out of eight models. In order to establish ways to reduce the demand for petrol, and the consequent by-product of reducing the amount of greenhouse gas emissions, we have estimated the impact on CO2 for several potential policy instruments, using Transportation and Environment Strategy Impact Simulator (an integrated transport, land use and environmental strategy impact simulation programme). We find that a carbon tax of AU$0.50/kg can reduce automobile kilometres by 5.9%, resulting in reduced demand for petrol and a reduction in CO2 of 1.5%.
We construct a political economy model to analyze the political acceptability of road pricing policies. We use a citizen-candidate framework with a population composed by three groups differing for their income level. We show that road pricing policies are never applied when there is no redistribution of the resources in favour of other modes of transport or when the congestion of these types of transport is relatively high. The results suggest that the efficiency of the redistribution of resources from road to the alternative types of transport as well as the fraction of the population that uses the road transport are key factors in explaining the adoption of road pricing schemes.
The objective of the QUITS project is to develop a methodology to improve decision-making in the transport sector by drawing attention to the internal and external quality dimensions. The investigation is based on the main assumption that the quality of a transport system depends on both internal and external variables.
Four road pricing systems, with charges based on cordons crossed, distance travelled, time spent travelling and time spent in congestion, have been tested using the congested assignment network model SATURN and its elastic assignment demand response routine, SATEASY. All tests have been based on a SATURN application of the city of Cambridge, with charges imposed inside an appropriate ring of bypasses. While initial results showed that congestion pricing achieved the greatest increase in average speed in the charged area, later analysis cast doubt on its superiority. Congestion pricing is able to distinguish more effectively the extent to which different types of journey contribute to congestion and achieves given reductions in travel at lower levels of charge. However, it is much less effective in reducing distance travelled and, by encouraging use of minor roads, may achieve far smaller environmental benefits. Time-based pricing performs better than the other systems on most indicators. Generally, the results suggest that when rerouting effects are included in the predictive modelling process the benefits of road pricing may be significantly smaller than previously expected.
This paper constructs a model of saving for retired single people that includes heterogeneity in medical expenses and life expectancies, and bequest motives. We estimate the model using Assets and Health Dynamics of the Oldest Old data and the method of simulated moments. Out-of-pocket medical expenses rise quickly with age and permanent income. The risk of living long and requiring expensive medical care is a key driver of saving for many higher-income elderly. Social insurance programs such as Medicaid rationalize the low asset holdings of the poorest but also benefit the rich by insuring them against high medical expenses at the ends of their lives. (c) 2010 by The University of Chicago. All rights reserved..
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