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The link approach to measuring consumer surplus in transport networks

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  • Maarten van 't Riet

    () (CPB Netherlands Bureau for Economic Policy Analysis)

Abstract

Should one calculate user benefits from changes in door-to-door journeys or from changes in the use of separate links of the network? The second approach is often discarded for its perceived inability to deal with new links and the OD-matrix approach is favoured. Differences arise when the set of used routes changes. A consumer model containing a general static transportation network with explicit non-negativity constraints serves as a basis for welfare measures expressed in shadow prices. The approximation error when applying the link approach need not be too severe. A rehabilitation of the link approach may be in order.

Suggested Citation

  • Maarten van 't Riet, 2011. "The link approach to measuring consumer surplus in transport networks," CPB Discussion Paper 199, CPB Netherlands Bureau for Economic Policy Analysis.
  • Handle: RePEc:cpb:discus:199
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    References listed on IDEAS

    as
    1. Eliasson, Jonas, 2009. "A cost-benefit analysis of the Stockholm congestion charging system," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(4), pages 468-480, May.
    2. Verhoef, Erik T., 2002. "Second-best congestion pricing in general static transportation networks with elastic demands," Regional Science and Urban Economics, Elsevier, vol. 32(3), pages 281-310, May.
    3. Neary, J. P. & Roberts, K. W. S., 1980. "The theory of household behaviour under rationing," European Economic Review, Elsevier, vol. 13(1), pages 25-42, January.
    4. Kidokoro, Yukihiro, 2006. "Benefit estimation of transport projects--a representative consumer approach," Transportation Research Part B: Methodological, Elsevier, vol. 40(7), pages 521-542, August.
    5. Yukihiro Kidokoro, 2004. "Cost-Benefit Analysis for Transport Networks: Theory and Application," Journal of Transport Economics and Policy, University of Bath, vol. 38(2), pages 275-307, May.
    6. Lee, Lung-Fei & Pitt, Mark M, 1986. "Microeconometric Demand Systems with Binding Nonnegativity Constraints: The Dual Approach," Econometrica, Econometric Society, vol. 54(5), pages 1237-1242, September.
    7. Van Dender, Kurt, 2004. "Pricing transport networks with fixed residential location," Regional Science and Urban Economics, Elsevier, vol. 34(3), pages 289-307, May.
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    More about this item

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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