Too Expensive to Meter: The influence of transaction costs in transportation and communication
AbstractTechnology appears to be making fine-scale charging (as in tolls on roads that depend on time of day or even on current and anticipated levels of congestion) increasingly feasible. And such charging appears to be increasingly desirable, as traffic on roads continues to grow, and costs and public opposition limit new construction. Similar incentives towards fine-scale charging also appear to be operating in communications and other areas, such as electricity usage. Standard economic theory supports such measures, and technology is being developed and deployed to implement them. But their spread is not very rapid, and prospects for the future are uncertain. This paper presents a collection of sketches, some from ancient history, some from current developments, that illustrate the costs that charging imposes. Some of those costs are explicit (in terms of the monetary costs to users, and the costs of implementing the charging mechanisms). Others are implicit, such as the time or the mental processing costs of users. These argue that the case for fine-scale charging is not unambiguous, and that in many cases may be inappropriate.
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Bibliographic InfoPaper provided by University of Minnesota: Nexus Research Group in its series Working Papers with number 200802.
Length: 24 pages
Date of creation: Feb 2007
Date of revision: Feb 2007
Publication status: Published in Philosophical Transactions of the Royal Society A: Mathematical Physical and Engineering Sciences 366(1872) pp 2033Ð2046, doi:10.1098/rsta.2008.0022
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More information through EDIRC
transportation; communication; transaction costs; collection costs;
Find related papers by JEL classification:
- R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
- R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion
- R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
- L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
- N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services
- N9 - Economic History - - Regional and Urban History
- H4 - Public Economics - - Publicly Provided Goods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-03-17 (All new papers)
- NEP-NET-2007-03-17 (Network Economics)
- NEP-PBE-2007-03-17 (Public Economics)
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