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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.

Suggested Citation

  • de Palma, André & Lindsey, Robin, 2007. "Chapter 2 Transport user charges and cost recovery," Research in Transportation Economics, Elsevier, vol. 19(1), pages 29-57, January.
  • Handle: RePEc:eee:retrec:v:19:y:2007:i:1:p:29-57
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    Cited by:

    1. 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.
    2. Bruno DE BORGER & Stefan PROOST, 2012. "Policies to reduce traffic externalities in cities," Working Papers Department of Economics ces12.10, KU Leuven, Faculty of Economics and Business, Department of Economics.
    3. De Borger, Bruno & Proost, Stef, 2015. "The political economy of public transport pricing and supply decisions," Economics of Transportation, Elsevier, vol. 4(1), pages 95-109.
    4. Bruno Borger & Stef Proost, 2016. "The political economy of pricing and capacity decisions for congestible local public goods in a federal state," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(5), pages 934-959, October.
    5. De Borger, Bruno & Dunkerley, Fay & Proost, Stef, 2009. "Capacity cost structure, welfare and cost recovery: Are transport infrastructures with high fixed costs a handicap?," Transportation Research Part B: Methodological, Elsevier, vol. 43(5), pages 506-521, June.
    6. Lindsey, Robin & de Palma, André, 2014. "Cost recovery from congestion tolls with long-run uncertainty," Economics of Transportation, Elsevier, vol. 3(2), pages 119-132.
    7. repec:pal:jmarka:v:5:y:2017:i:3:d:10.1057_s41270-017-0025-3 is not listed on IDEAS
    8. Lindsey, Robin, 2012. "Road pricing and investment," Economics of Transportation, Elsevier, vol. 1(1), pages 49-63.
    9. 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.
    10. Kidokoro, Yukihiro & Lin, Ming Hsin & Zhang, Anming, 2016. "A general-equilibrium analysis of airport pricing, capacity, and regulation," Journal of Urban Economics, Elsevier, vol. 96(C), pages 142-155.
    11. Erik T. Verhoef, 2012. "Cost Recovery of Congested Infrastructure under Market Power," Tinbergen Institute Discussion Papers 12-064/3, Tinbergen Institute.
    12. repec:eee:juecon:v:101:y:2017:i:c:p:45-56 is not listed on IDEAS

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