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Alternative pricing regimes in interurban passenger transport with externalities and modal competition

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Author Info

  • Cantos-Sánchez, Pedro
  • Moner-Colonques, Rafael
  • Sempere-Monerris, José J.
  • Álvarez-SanJaime, Óscar

Abstract

We develop an interurban passenger transport model with modal competition, where modes are perceived as differentiated products, and capture all major externalities. Our objective is to establish whether alternative regulatory regimes, which may involve road tolls, may lead to a traffic allocation, user welfare, and total welfare that may be closer to the social optimum. An empirical application to interurban Spanish travel is undertaken. We find that the private regime yields the lowest total welfare level: 12.6% below the social optimum level. Optimum pricing requires a toll on car transport of 5.1 cents of per passenger-km, and a price decrease of all other modes, relative to the current regime. Finally, the social optimum without toll regime attains the welfare level closest to the social optimum, though it implies a reallocation of welfare from firms to users and higher environmental costs.

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Bibliographic Info

Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 39 (2009)
Issue (Month): 2 (March)
Pages: 128-137

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Handle: RePEc:eee:regeco:v:39:y:2009:i:2:p:128-137

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Web page: http://www.elsevier.com/locate/regec

Related research

Keywords: Interurban transport Optimal pricing Competition Externalities;

References

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  1. DE BORGER, Bruno & PROOST, Stef & VAN DENDER, Kurt, 2004. "Congestion and tax competition in a parallel network," CORE Discussion Papers 2004018, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  11. Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1992. "Route choice with heterogeneous drivers and group-specific congestion costs," Regional Science and Urban Economics, Elsevier, vol. 22(1), pages 71-102, March.
  12. Liu, Louie Nan & McDonald, John F., 1998. "Efficient Congestion Tolls in the Presence of Unpriced Congestion: A Peak and Off-Peak Simulation Model," Journal of Urban Economics, Elsevier, vol. 44(3), pages 352-366, November.
  13. Proost, Stef & Van Dender, Kurt, 2001. "The welfare impacts of alternative policies to address atmospheric pollution in urban road transport," Regional Science and Urban Economics, Elsevier, vol. 31(4), pages 383-411, July.
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Cited by:
  1. Volodymir BilotKach & Xavier Fageda & Ricardo Flores-Fillol, 2009. "Scheduled service versus personal transportation: the role of distance," Working Papers 2009-10, FEDEA.

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