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How large is the gap between present and efficient transport prices in Europe?

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Author Info
Proost, S.
Van Dender, K.
Courcelle, C.
De Borger, B.
Peirson, J.
Sharp, D.
Vickerman, R.
Gibbons, E.
O'Mahony, M.
Heaney, Q.
Van den Bergh, J.
Verhoef, E.

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Abstract

In this paper, we analyse the gap between present transport prices and efficient transport prices. Efficient transport prices are those prices that maximise economic welfare, including external costs (congestion, air pollution, accidents). The methodology is applied to six urban and interregional case studies using one common optimal pricing model. The case studies cover passenger as well as freight transport and cover all modes. We find that prices need to be raised most for peak urban passenger car transport and to a lesser extent for interregional road transport. Optimal pricing results for public transport are more mixed. We show that current external costs on congested roads are a bad guide for optimal taxes and tolls: the optimal toll that takes into account the reaction of demand is often less than one third of the present marginal external cost.

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Publisher Info
Article provided by Elsevier in its journal Transport Policy.

Volume (Year): 9 (2002)
Issue (Month): 1 (January)
Pages: 41-57
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Handle: RePEc:eee:trapol:v:9:y:2002:i:1:p:41-57

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  1. Cruijssen, F. & Salomon, M., 2004. "Empirical study : order sharing between transportation companies may result in cost reductions between 5 to 15 percent," Discussion Paper 80, Tilburg University, Center for Economic Research. [Downloadable!]
  2. Amihai Glazer & Stef Proost, 2007. "The Preferences of Voters Over Road Tolls and Road Capacity," Working Papers 060712, University of California-Irvine, Department of Economics. [Downloadable!]
  3. de Rus, Gines & Campos, Javier, 2005. "Los fundamentos económicos de la política de transporte europea: un análisis crítico
    [The foundations of the European transport policy]
    ," MPRA Paper 12395, University Library of Munich, Germany. [Downloadable!]
  4. Stef Proost & Inge Mayeres, 2005. "Towards better transport pricing and taxation in Belgium," Energy, Transport and Environment Working Papers Series ete0504, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment. [Downloadable!]
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  5. Stef Proost & Kurt Van Dender, 2003. "Marginal Social Cost Pricing for all Transport modes and the effects of modal budget constraints," Energy, Transport and Environment Working Papers Series ete0311, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment. [Downloadable!]
    Other versions:
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