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Too Expensive to Meter: The influence of transaction costs in transportation and communication

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Author Info
David Levinson () (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
Andrew Odlyzko (Digital Technology Center, University of Minnesota)

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Abstract

Technology 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 opposi- tion 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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File URL: http://nexus.umn.edu/Papers/TooExpensiveToMeter.pdf
File Format: application/pdf
File Function: First version, 2007
Download Restriction: no

Publisher Info
Paper provided by University of Minnesota: Nexus Research Group in its series Working Papers with number 000025.

Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Length: 24 pages
Date of creation: Feb 2007
Date of revision: Feb 2007
Handle: RePEc:nex:wpaper:tooexpensivetometer

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Postal: Dept. of Civil Engineering, 500 Pillsbury Drive SE, Minneapolis, MN 55455
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Web page: http://nexus.umn.edu
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Related research
Keywords: transportation communication transaction costs collection costs

Find related papers by JEL classification:
R40 - Urban, Rural, and Regional Economics - - Transportation Systems - - - General
R41 - Urban, Rural, and Regional Economics - - Transportation Systems - - - Transportation: Demand, Supply, and Congestion
R48 - Urban, Rural, and Regional Economics - - Transportation Systems - - - Government Pricing; Regulatory Policies
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

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Odlyzko, Andrew, 2000. "The Internet and other networks: utilization rates and their implications," Information Economics and Policy, Elsevier, vol. 12(4), pages 341-365, December. [Downloadable!] (restricted)
  2. David Levinson, 2001. "Why States Toll: An Empirical Model of Finance Choice," Working Papers 200102, University of Minnesota: Nexus Research Group. [Downloadable!]
  3. Bogart, Dan, 2005. "Turnpike Trusts, Infrastructure Investment, and the Road Transportation Revolution in Eighteenth-Century England," The Journal of Economic History, Cambridge University Press, vol. 65(02), pages 540-543, June. [Downloadable!]
  4. Amy Finkelstein, 2007. "E-ZTax: Tax Salience and Tax Rates," NBER Working Papers 12924, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Andrew Odlyzko, 2004. "The Evolution of Price Discrimination in Transportation and its Implications for the Internet," Review of Network Economics, Concept Economics, vol. 3(3), pages 323-346, September. [Downloadable!]
  6. McCarthy Patrick & Tay Richard, 1993. "Economic Efficiency vs Traffic Restraint: A Note on Singapore's Area License Scheme," Journal of Urban Economics, Elsevier, vol. 34(1), pages 96-100, July. [Downloadable!] (restricted)
  7. Bogart, Dan, 2005. "Turnpike trusts and the transportation revolution in 18th century England," Explorations in Economic History, Elsevier, vol. 42(4), pages 479-508, October. [Downloadable!] (restricted)
  8. Anna Matas Prat, 2003. "Demand and revenue implications of an integrated public transport policy. The case of," Working Papers wpdea0304, Department of Applied Economics at Universitat Autonoma of Barcelona. [Downloadable!]
  9. FitzRoy, Felix & Smith, Ian, 1999. "Season Tickets and the Demand for Public Transport," Kyklos, Blackwell Publishing, vol. 52(2), pages 219-38.
    Other versions:
  10. Coase, R H, 1974. "The Lighthouse in Economics," Journal of Law & Economics, University of Chicago Press, vol. 17(2), pages 357-76, October.
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