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

Author

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  • Inge Mayeres

    () (K.U.Leuven, C.E.S., Energy, Transport and Environment)

  • Stef Proost

    () (K.U.Leuven, C.E.S., Energy, Transport and Environment)

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," Energy, Transport and Environment Working Papers Series ete0212, KU Leuven, Department of Economics - Research Group Energy, Transport and Environment.
  • Handle: RePEc:ete:etewps:ete0212
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    File URL: https://lirias.kuleuven.be/bitstream/123456789/544189/1/ETE-WP-2002-12%281%29.pdf
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    References listed on IDEAS

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    1. Don Fullerton, 2001. "A Framework to Compare Environmental Policies," Southern Economic Journal, Southern Economic Association, vol. 68(2), pages 224-248, October.
    2. Goulder, Lawrence H. & Parry, Ian W. H. & Williams III, Roberton C. & Burtraw, Dallas, 1999. "The cost-effectiveness of alternative instruments for environmental protection in a second-best setting," Journal of Public Economics, Elsevier, vol. 72(3), pages 329-360, June.
    3. S. Proost & D. Regemorter, 1995. "The double dividend and the role of inequality aversion and macroeconomic regimes," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(2), pages 207-219, August.
    4. Jensen, Jesper & Rasmussen, Tobias N., 2000. "Allocation of CO2 Emissions Permits: A General Equilibrium Analysis of Policy Instruments," Journal of Environmental Economics and Management, Elsevier, vol. 40(2), pages 111-136, September.
    5. Parry, Ian W. H. & Williams, Roberton III & Goulder, Lawrence H., 1999. "When Can Carbon Abatement Policies Increase Welfare? The Fundamental Role of Distorted Factor Markets," Journal of Environmental Economics and Management, Elsevier, vol. 37(1), pages 52-84, January.
    6. A. Lans Bovenberg & Lawrence H. Goulder, 2001. "Neutralizing the Adverse Industry Impacts of CO2 Abatement Policies: What Does It Cost?," NBER Chapters,in: Behavioral and Distributional Effects of Environmental Policy, pages 45-90 National Bureau of Economic Research, Inc.
    7. Ottar Mæstad, 2001. "Efficient Climate Policy with Internationally Mobile Firms," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 19(3), pages 267-284, July.
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    Citations

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    Cited by:

    1. 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.
    2. 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.
    3. 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

    Keywords

    transport economics; externalities; externality tax; equity; efficiency; political acceptability;

    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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