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Chapter 2 Transport user charges and cost recovery

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  • de Palma, André
  • Lindsey, Robin

Abstract

According to the celebrated cost recovery theorem, the degree of cost recovery from optimal user charges depends on the extent of scale economies in user costs, infrastructure construction costs and operating costs. This chapter presents the theorem, and reviews various generalisations of it. It then summarises empirical evidence by transport mode on the degree of scale economies or diseconomies in usage and in infrastructure, and the predicted surpluses or deficits with efficient pricing and investment. It also discusses some of the practical challenges in translating the cost recovery theorem into policy.

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Bibliographic Info

Article provided by Elsevier in its journal Research in Transportation Economics.

Volume (Year): 19 (2007)
Issue (Month): 1 (January)
Pages: 29-57

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Handle: RePEc:eee:retrec:v:19:y:2007:i:1:p:29-57

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Cited by:
  1. Kockelman, Kara M. & Lemp, Jason D., 2011. "Anticipating new-highway impacts: Opportunities for welfare analysis and credit-based congestion pricing," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(8), pages 825-838, October.
  2. Bruno DE BORGER & Stefan PROOST, 2012. "Policies to reduce traffic externalities in cities," Center for Economic Studies - Discussion papers ces12.10, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  3. DE BORGER, Bruno & DUNKERLEY, Fay & PROOST, Stef, 2008. "Capacity cost structure, welfare and cost recovery: Are transport infrastructures with high fixed costs a handicap?," Working Papers 2008001, University of Antwerp, Faculty of Applied Economics.
  4. Erik T. Verhoef, 2012. "Cost Recovery of Congested Infrastructure under Market Power," Tinbergen Institute Discussion Papers 12-064/3, Tinbergen Institute.
  5. Lindsey, Robin, 2009. "Cost recovery from congestion tolls with random capacity and demand," Journal of Urban Economics, Elsevier, vol. 66(1), pages 16-24, July.

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