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Endogenising demand for information in road transport

Author

Listed:
  • Richard H. M. Emmerink

    () (Department of Spatial Economics, Free University, De Boelelaan 1105, 1081 HV Amsterdam, The Netherlands)

  • Erik T. Verhoef

    () (Department of Spatial Economics, Free University, De Boelelaan 1105, 1081 HV Amsterdam, The Netherlands)

  • Peter Nijkamp

    () (Department of Spatial Economics, Free University, De Boelelaan 1105, 1081 HV Amsterdam, The Netherlands)

  • Piet Rietveld

    () (Department of Spatial Economics, Free University, De Boelelaan 1105, 1081 HV Amsterdam, The Netherlands)

Abstract

In this paper, the impact of endogenous information provision to drivers in road transport is investigated. A static economic equilibrium model is used, which allows potential road users to buy information on the prevailing (stochastic) traffic situation. It takes for granted that an indiviual will try to acquire proper information when the private benefits of doing so exceed the private costs. By using an information model for road users, the interesting result is found that the provision of endogenous information leads to a strict Pareto improvement. Furthermore, the model shows that - depending on the price of information - it can be efficiency improving to subsidise or tax the motorist information to the user. Finally, there is a relationship between fine congestion pricing and subsidising motorist information. It turns out that the social welfare maximising subsidy under first-best congestion pricing is equal to zero. However, subsidising information may be an attractive policy instrument when a flat congestion pricing scheme is preferred.

Suggested Citation

  • Richard H. M. Emmerink & Erik T. Verhoef & Peter Nijkamp & Piet Rietveld, 1996. "Endogenising demand for information in road transport," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 30(2), pages 201-222.
  • Handle: RePEc:spr:anresc:v:30:y:1996:i:2:p:201-222
    Note: Received: June 1995 / Accepted: January 1996
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    Cited by:

    1. Emmerink, Richard H. M. & Verhoef, Erik T. & Nijkamp, Peter & Rietveld, Piet, 1998. "Information policy in road transport with elastic demand: Some welfare economic considerations," European Economic Review, Elsevier, vol. 42(1), pages 71-95, January.
    2. Zhang, Rong & Verhoef, Erik T., 2006. "A monopolistic market for advanced traveller information systems and road use efficiency," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(5), pages 424-443, June.
    3. David Levinson, 2003. "The Value of Advanced Traveler Information Systems for Route Choice," Working Papers 200307, University of Minnesota: Nexus Research Group.
    4. Kobayashi, Kiyoshi & Do, Myungsik, 2005. "The informational impacts of congestion tolls upon route traffic demands," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(7-9), pages 651-670.
    5. Gardner, Lauren M. & Boyles, Stephen D. & Waller, S. Travis, 2011. "Quantifying the benefit of responsive pricing and travel information in the stochastic congestion pricing problem," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(3), pages 204-218, March.
    6. André de Palma & Robin Lindsey & Nathalie Picard, 2012. "Risk Aversion, the Value of Information, and Traffic Equilibrium," Transportation Science, INFORMS, vol. 46(1), pages 1-26, February.
    7. Irene Casas & Mei-Po Kwan, 2007. "The Impact of Real-Time Information on Choices During the Commute Trip: Evidence from a Travel Simulator," Growth and Change, Wiley Blackwell, vol. 38(4), pages 523-543.

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