Pricing and investment of cross-border transport infrastructure
AbstractWe develop a simple two-country model of international trade in which the transportation cost between countries is endogenously determined by pricing and investment decisions of cross-border transport infrastructure. We evaluate alternative regimes of pricing and investment, i.e., free access (e.g., public road), pricing by two governments, and private operation. We also examine the effect of integrating operation. It is shown that investment rule in free access regime is inefficient. On the other hand, the investment rule is efficient if infrastructure charge is levied either by the government or by the private operators. We obtain the welfare ranking of alternative regimes under specific functional form, show how the welfare results depend on pricing policies.
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Bibliographic InfoArticle provided by Elsevier in its journal Regional Science and Urban Economics.
Volume (Year): 40 (2010)
Issue (Month): 4 (July)
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Infrastructure Transportation Trade Pricing Capacity choice;
Other versions of this item:
- Se-il Mun & Shintaro Nakagawa, 2008. "Pricing and investment of cross-border transport infrastructure," KIER Working Papers 661, Kyoto University, Institute of Economic Research.
- H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
- R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Systems - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
- R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Systems - - - Government Pricing and Policy
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