Measuring the Marginal Social Cost of Transport (eBook)

Cover 1
Measuring the Marginal Social Cost of Transport 4
Contents 6
List of Contributors 8
Acknowledgements 10
Foreword 12
Transport Pricing Policy and the Research Agenda 16
Background 16
Applying Marginal Social Cost Pricing theory to Transport 18
A Critique of Marginal Cost-Based Pricing 20
Developments in EC Transport Pricing Policy 27
Resulting Research Needs 30
Outline of the Book 32
References 32
Alternative Pricing Doctrines 34
Introduction 34
The Benchmark: The Marginal Social Cost Pricing Principle 35
An Overview of Pricing Doctrines in a Selection of European Countries 37
A Review of Doctrines Employed in Teaching, Policy and Practice 38
Differences about Teaching 38
Differences about Political Doctrines 39
Differences between Infrastructure Pricing Practice and Principles 40
Criticisms of SRMC Pricing 42
Alternative Concepts 43
Are these Alternative Concepts Consistent with the Theory? 46
The First Best Situation 46
Second Best Situations 47
Externalities and Public Goods 47
Monopolistic Markets 47
Non-optimal Taxes 48
Redistribution Concerns 48
The Limits of Partial Analysis. Advantages of a General Equilibrium Analysis 48
Problems of Uncertainty, Information and Institutions 49
Relations between the Infrastructure Manager and the Operators 50
Prices or Quantities Regulations 50
The Use of Auctions 51
How to Induce Efficiency in Operations? 51
Relations between the Infrastructure Manager and the Regulator 52
Problems of Jurisdictions 53
Conclusions on Information, Uncertainty and Institutions 54
Overall Conclusions 55
Notes 57
References 57
Infrastructure 64
Introduction 64
Methodological Issues in Measuring Marginal Infrastructure Costs 65
Econometric Approaches 66
Output Definition and Separation 68
Input Prices 69
Time-Series-based Approaches 70
Engineering Approaches for Marginal Cost Estimation 70
Distinction between Variable and Fixed Costs in Top-Down Costing Studies 72
Methodological Issues and Marginal Cost Estimates Per Mode of Transport 72
Road 74
An Econometric Approach 74
An Analytical Approach 77
Summary 81
Rail 82
The Swedish Study 83
The British Study 89
Summary 90
Conclusions for Policy and Research 94
Notes 95
References 96
Operating Costs 100
Introduction 100
Methodology 101
Air Transport 104
Introduction 104
Review of Air Transport-Specific Literature and Reporting of Marginal Cost Estimates 107
Rail Transport 121
Introduction 121
Review of Rail Transport-Specific Literature and Reporting of Marginal Cost Estimates 123
Urban Transport 126
Introduction 126
Review of Urban Specific Literature and Reporting of Marginal Cost Estimates 128
Conclusion 133
Notes 136
References 137
User Costs and Benefits 140
Introduction 140
The Cost Side: Estimating Congestion Costs 141
The Valuation of Travel Time 142
Speed-Flow Functions 144
Demand Functions and System Specifications 150
Application: The Congestion Cost Case Studies 152
The Mohring Effect in Public Transport Policy Analysis 154
The Generalised Mohring Effect 155
The Relative Size of the Mohring Effect in Public Transport 157
MC Pricing of Public Transport and the Mohring Effect 158
The Headway Cost in the Whole Range of Service Frequency 160
Conceptual Discussion: Frequency Delay 161
The Empirical Headway Cost Function 163
An Alternative Approach 165
Conclusion 167
Notes 167
References 168
Accidents 170
Introduction 170
Valuation of Accidents 171
Marginal Cost of Accidents 174
A Formal Derivation of the Marginal Cost 175
Internal and External Accident Costs 176
The Risk Elasticity 176
A General Example 177
Two Case Studies 178
Railway Level Crossing Accidents 178
Heavy Goods Vehicles 186
Some Further Key Issues 192
Risk-Avoiding Behaviour 192
Liability 194
Charges on Behaviour? 195
Notes 195
References 196
Environmental Costs 200
Introduction 200
State of the Art in Quantifying Marginal Environmental Costs 202
Relevant Cost Categories 202
Methodology 204
Uncertainties and Gaps 206
Current Results and Generalisation 209
Costs Due to Air Pollution 209
Direct Exhaust Emissions 210
Road Transport 210
Other Modes 213
Indirect Emissions from Electricity Production and Fuel Production 213
Generalisation Aspects 214
Costs Due to Noise 215
Costs Due to Global Warming 217
Conclusions 220
Methodology 220
Policy 221
Research 222
References 223
The Impacts of Marginal Social Cost Pricing 226
Introduction 226
The basic features of the simulation exercises 228
The Pricing Scenarios 228
The Models: Partial versus General Equilibrium Approach 229
The Direct Effects of Marginal Social Cost Pricing and Average Cost Pricing 230
The TRENEN Model in Brief 230
The Implementation of the Pricing Scenarios in TRENEN 232
Results 233
Tax Levels 233
Traffic Level and Composition 235
Welfare Impacts 236
The Indirect Effects of Alternative Pricing Approaches 237
The CGE Model for Belgium 238
The Policy Scenarios 241
Marginal Social Cost Pricing 241
Average Cost Pricing 242
Results 243
Transport Prices, Transport Demand and Marginal External Costs 243
Marginal Social Cost Pricing 243
Average Cost Pricing 245
The Transport Accounts 246
The Impact on Welfare 250
Marginal Social Cost Pricing 250
Average Cost Pricing 252
Conclusions 253
Notes 254
References 257
The Social Costs of Intermodal Freight Transport 260
Introduction 260
The Policy Context 260
Cost Information as a Basic Prerequisite 261
Intermodal Freight Transport: Assessment of Current Position in the Overall EU Market 263
Definitions and Overall Market Position 263
Impacts of Institutional Factors on Supply (Costs) and Demand (Prices) 263
Cost and Price Formation Along the Intermodal Chain 265
Loading/Unloading – Shipper/Consignee 265
Pre-Haulage/Post-Haulage 266
Transhipment 266
Terminal Transfer 266
Marshalling Yard Transfer 266
Main Haulage: Road 267
Main Haulage: Rail/Train 267
Main Haulage: Inland Waterway 267
Main Haulage: Maritime 267
Measuring the Marginal Social Costs of Intermodal Transport 268
An Integrated Accounting Framework for Intermodal Freight Transport 268
Cost Drivers and Cost Functions 273
Unit Costs of Resources Vary throughout Europe 273
Efficiency of Operations 273
Load Factors 274
The Length of a Journey Leg 274
The Characteristics of the Journey Leg 274
The Scale of Movement 274
The RECORDIT Corridors 278
Internal Costs 281
Methodology 281
Cost Values 282
External Costs 283
Methodology 283
Cost Values 283
Marginal Social Costs and Policy Formulation in the Intermodal Transport Sector 286
Assessing Market Imbalances: Current Cost Coverage of Competing Options 286
Increasing the Competitiveness of Intermodal Transport through the Reduction of Costs 287
Rail Interoperability and Efficiency Improvements in Terminals/Transhipment Operations 288
Rationalising Pre- and Post-Haulage Operations 289
Load Factor 290
Type of Truck Technology 292
Rail Haul Improvements 293
Internalising External Costs 294
Charging for Door-to-Door Intermodal Services 294
From Corridors to Countries 295
Impacts of Internalisation on Intermodal Demand 297
Conclusion 299
References 300
Measuring Marginal Social Cost: Methods, Transferability 302
Introduction 302
Empirical Results 303
Measurement and Transferability 306
Generalisation of Marginal costs of Infrastructure Use 310
Generalisation Aspects of Supplier Operating Costs 312
Generalisation Aspects of User Costs and Benefits 313
Generalisation Aspects on Marginal Costs of Accidents 316
Generalisation Aspects of Marginal Environmental Costs 317
Transfer of Money Values 321
Conclusions 326
Transfer of Methodology 326
Transfer of Functional Form and Input Values 326
Transfer of Output Values 327
References 329
Policy Conclusions 330
Introduction 330
Towards Implementation of Marginal Social Cost Based Pricing in Transport 332
Conclusions 338
References 341
Author Index 342
Subject Index 348