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Macroeconomic Effects of a Mileage-Dependent Toll Payable by Heavy-Goods Vehicles on Motorways in Austria

Author

Listed:
  • Kurt Kratena
  • Wilfried Puwein

    (WIFO)

Abstract

The toll to be imposed on heavy-goods vehicles will drive up the cost of using motorways with the distance driven. As a consequence, it will provide an incentive to improve the utilisation of cargo space. Transports for hire or reward are better positioned to exploit streamlining options than transports on own account. The toll will cover part of the external costs of the goods transport by road. This will in turn strengthen the competitive position of the railway, which could charge higher freight rates for long-distance haulage and multi-modal transportation. In assessing the macroeconomic effects of a toll on heavy-goods vehicles, Variant A starts out from a rate of 0.14 € per kilometre driven by a four-axle heavy-goods vehicle (toll revenues of € 322 million), whereas Variant B assumes 0.25 € (toll revenues of € 576 million) by 2004. The revenues will be wholly invested in the network of motorways. Of those toll revenues, 58 percent will derive from domestic transports, 14 percent from import transports, 12 percent from export transports, and 16 percent from transit traffic by domestic and foreign heavy-goods vehicles. The macroeconomic impact of the toll in 2004 is estimated by using the MULTIMAC model. Its main findings are: • The toll will raise domestic prices (in terms of the consumer price index) by 0.11 percent in Variant A, and by 0.20 percent in Variant B. Price increases will be relatively steep for products of the stoneware, glassware, mining and oil processing industries. • The toll will boost GDP by 0.08 percent (0.15 percent in Variant B), as a result of greater investments in the roads. This will primarily benefit the construction industry, whereas the chemical industry will suffer the greatest decline of growth rates. • The number of employed will rise in line with greater GDP growth (+3,200 in Variant A, +5,700 in Variant B), whereas unemployment will drop by 0.1 percent (0.2 percent). • The relative price increase of domestic production and greater final demand at the domestic level will reduce exports and boost imports. As a result, the foreign trade balance will deteriorate by € 115 million (€ 205 million for Variant B) at 1995 prices. If this sum is reduced by the toll takings from foreign heavy-goods vehicles and coaches, the balance of payments loss will be just € 45 million (or € 80 million for Variant B) at 2004 prices. The toll will exert its worst effect on production locations in Burgenland, but will have little impact on Vienna and Vorarlberg. The toll will have a beneficial effect on the environmental situation. It will cause changes in production processes by reducing transport. Some of those transports will be shifted from the road to the rail. Better utilisation of the existing loading space in turn will cut down on noise and pollution emissions. Introducing a toll on heavy-goods vehicles fosters economic policy objectives such as growth, employment and environmental protection. On the other hand, it makes inroads on price stability and shakes up the external economic balance. Nevertheless, its effects will be of a relatively minor scale.

Suggested Citation

  • Kurt Kratena & Wilfried Puwein, 2002. "Macroeconomic Effects of a Mileage-Dependent Toll Payable by Heavy-Goods Vehicles on Motorways in Austria," WIFO Monatsberichte (monthly reports), WIFO, vol. 75(2), pages 107-119, February.
  • Handle: RePEc:wfo:monber:y:2002:i:2:p:107-119
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    References listed on IDEAS

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    1. anonymous, 1995. "Does the bouncing ball lead to economic growth?," Regional Update, Federal Reserve Bank of Atlanta, issue Jul, pages 1-2,4-6.
    2. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
    3. Xavier Sala-I-Martin, 1997. "Transfers, Social Safety Nets, and Economic Growth," IMF Staff Papers, Palgrave Macmillan, vol. 44(1), pages 81-102, March.
    4. Kurt Kratena & Gerold Zakarias, "undated". "MULTIMAC IV: A Disaggregated Econometric Model of the Austrian Economy," WIFO Working Papers 160, WIFO.
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