Travel distance and optimal transport policy
A theoretical model is adopted in order to discuss optimal fare and optimal quality of supply schemes for a transport operator. The analysis shows how fare and quality of supply are related to travel distance and to the transport operator's emphasis on profit versus consumer surplus. Under reasonable assumptions imposed on the actual functions we find that the more weight the operator attaches to profit, the higher the fare level and the higher the generalised travel costs. How the operator's objectives influence the quality of transport and perhaps more surprisingly how travelling distance influences fares, quality of transport and generalised travel costs, are ambiguous with relation to the starting restrictions placed on the actual functions. The paper then discusses the special case in which the quality of transport is exogenous to the transport operator. One important result is that higher demands set to the transport operator regarding the quality of the transport supply do not necessarily reduce the transport users' generalised travel costs. Some of the model's results are commented in the light of empirical studies from Norway.
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 38 (2004)
Issue (Month): 5 (June)
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/548/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional|
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.:
- A. Michael Spence, 1975. "Monopoly, Quality, and Regulation," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 417-429, Autumn.
- Lewis, Tracy R & Sappington, David E M, 1988.
"Regulating a Monopolist with Unknown Demand,"
American Economic Review,
American Economic Association, vol. 78(5), pages 986-98, December.
- Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 321-389, June.
- Mohring, Herbert, 1972. "Optimization and Scale Economies in Urban Bus Transportation," American Economic Review, American Economic Association, vol. 62(4), pages 591-604, September.
- Baumol, William J & Bradford, David F, 1970. "Optimal Departures from Marginal Cost Pricing," American Economic Review, American Economic Association, vol. 60(3), pages 265-83, June.
When requesting a correction, please mention this item's handle: RePEc:eee:transb:v:38:y:2004:i:5:p:415-430. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.