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Reforming transport pricing: an economist's perspective on equity, efficiency and acceptability

Author

Listed:
  • Inge Mayeres
  • Stef Proost

Abstract

This paper applies the traditional definition of equity and efficiency in economics to transport pricing. It is shown how this framework can also be used to define acceptability. The problems and potential of this approach are illustrated by examining the effects for Belgium of replacing current transport pricing by marginal social cost pricing. The welfare effects on different income groups of this pricing reform are shown for different income groups using a computable general equilibrium model. We demonstrate how the efficiency, equity and acceptability of the reform depend not only on the change in transport prices but also on the way the extra tax revenues are used. We compare the effects of the use of net tax revenues for higher social transfers and for lower labour taxes.

Suggested Citation

  • Inge Mayeres & Stef Proost, 2002. "Reforming transport pricing: an economist's perspective on equity, efficiency and acceptability," Working Papers of Department of Economics, Leuven 544189, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    • Handle: RePEc:ete:ceswps:544189
    Note: paper number ETE WP 2002-12
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    File URL: https://lirias.kuleuven.be/retrieve/1616daf7-7ef3-4249-97e7-c9bd85b01f75
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    Cited by:

    1. is not listed on IDEAS
    2. Jonas Westin, 2011. "Labor Market Effects of Road Pricing in a Population with Continuously Distributed Value of Time," ERSA conference papers ersa10p1458, European Regional Science Association.
    3. David Levinson, 2009. "Equity Effects of Road Pricing: A Review," Transport Reviews, Taylor & Francis Journals, vol. 30(1), pages 33-57, July.
    4. Inge Mayeres & Stef Proost, 2004. "Towards better transport pricing and taxation in Belgium," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(4), pages 23-43.
    5. Abbes, Souhir, 2007. "Marginal social cost pricing in European seaports," European Transport \ Trasporti Europei, ISTIEE, Institute for the Study of Transport within the European Economic Integration, issue 36, pages 4-26.

    More about this item

    JEL classification:

    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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