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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
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
Contact details of provider:
Postal: Dept. of Civil Engineering, 500 Pillsbury Drive SE, Minneapolis, MN 55455
Phone: +01 (612) 625-6354
Fax: +01 (612) 626-7750
Web page: http://nexus.umn.edu
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)
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.:
- FitzRoy, Felix & Smith, Ian, 1999.
"Season Tickets and the Demand for Public Transport,"
Wiley Blackwell, vol. 52(2), pages 219-38.
- Felix R FitzRoy & Ian Smith, 1998. "Season Tickets and the Demand for Public Transport," CRIEFF Discussion Papers 9802, Centre for Research into Industry, Enterprise, Finance and the Firm.
- Mackie, Peter, 2005. "The London congestion charge: A tentative economic appraisal. A comment on the paper by Prud'homme and Bocajero," Transport Policy, Elsevier, vol. 12(3), pages 288-290, May.
- Amy Finkelstein, 2007. "E-ZTax: Tax Salience and Tax Rates," NBER Working Papers 12924, National Bureau of Economic Research, Inc.
- repec:ucp:bkecon:9780226199993 is not listed on IDEAS
- 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.
- 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.
- Odlyzko Andrew, 2004. "The Evolution of Price Discrimination in Transportation and its Implications for the Internet," Review of Network Economics, De Gruyter, vol. 3(3), pages 1-24, September.
- 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.
- Prud'homme, Rémy & Bocarejo, Juan Pablo, 2005. "The London congestion charge: a tentative economic appraisal," Transport Policy, Elsevier, vol. 12(3), pages 279-287, May.
- Coase, R H, 1974. "The Lighthouse in Economics," Journal of Law and Economics, University of Chicago Press, vol. 17(2), pages 357-76, October.
- Anna Matas, 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.
- 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.
- Hutlkrantz, Lars & Armelius, Hanna, 2005.
"The Politico-Economic Link Between Public Transport And Road Pricing: An Ex-Ante Study Of The Stockholm Road-Pricing Trial,"
2005:8, Örebro University, School of Business.
- Armelius, Hanna & Hultkrantz, Lars, 2006. "The politico-economic link between public transport and road pricing: An ex-ante study of the Stockholm road-pricing trial," Transport Policy, Elsevier, vol. 13(2), pages 162-172, March.
- David Levinson, 2001.
"Why States Toll: An Empirical Model of Finance Choice,"
Journal of Transport Economics and Policy,
London School of Economics and University of Bath, vol. 35(2), pages 223-237, May.
- David Levinson, 2001. "Why States Toll: An Empirical Model of Finance Choice," Working Papers 200102, University of Minnesota: Nexus Research Group.
- Benjamin Edelman, 2009. "Priced and Unpriced Online Markets," Journal of Economic Perspectives, American Economic Association, vol. 23(3), pages 21-36, Summer.
- Lindsey, Robin & Wang, Judith & Yang, Hai, 2010.
"Nonlinear Pricing on Private Roads with Congestion and Toll Collection Costs,"
2010-3, University of Alberta, Department of Economics.
- Wang, Judith Y.T. & Lindsey, Robin & Yang, Hai, 2011. "Nonlinear pricing on private roads with congestion and toll collection costs," Transportation Research Part B: Methodological, Elsevier, vol. 45(1), pages 9-40, January.
- Lindsey, Robin, 2011.
"State-dependent congestion pricing with reference-dependent preferences,"
Transportation Research Part B: Methodological,
Elsevier, vol. 45(10), pages 1501-1526.
- Lindsey, Robin, 2010. "State-dependent congestion pricing with reference-dependent preferences," Working Papers 2010-4, University of Alberta, Department of Economics.
- Nikolas Geroliminis & David Levinson, 2008. "Cordon pricing consistent with the physics of overcrowding," Working Papers 000038, University of Minnesota: Nexus Research Group.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (David Levinson).
If references are entirely missing, you can add them using this form.