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The Full Cost of Intercity Highway Transportation

  • David Levinson

    ()

    (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)

  • David Gillen

In this paper we review the theoretical and empirical literature on the cost structure of the provision of intercity highway transportation and specify and estimate our own cost functions . We develop a full cost model which identifies the key cost components and then estimate costs component by component: user costs, infrastructure costs, time and congestion costs, noise costs, accident costs, and pollution costs. The total long run average cost is $0.34 per vehicle kilometer traveled. The single largest cost category is freeflow travel time. While the marginal cost of infrastructure is higher than its average cost, indicating that new construction is increasingly expensive, the marginal cost of driving (user fixed and variable costs) is less than the average cost, indicating that by increasing travel the user can spread his fixed cost of a vehicle over more trips without penalty. .

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File URL: http://nexus.umn.edu/Papers/FullCostIntercityHighways.pdf
File Function: First version, 2007
Download Restriction: no

Paper provided by University of Minnesota: Nexus Research Group in its series Working Papers with number 199704.

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Length:
Date of creation: 1997
Date of revision:
Publication status: Published in Transportation Research -D 3:4 207-223.
Handle: RePEc:nex:wpaper:fullcostintercityhighways
Contact details of provider: Postal: Dept. of Civil Engineering, 500 Pillsbury Drive SE, Minneapolis, MN 55455
Phone: +01 (612) 625-6354
Fax: +01 (612) 626-7750
Web page: http://nexus.umn.edu

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  1. Small, Kenneth A. & Kazimi, Camilla, 1995. "On the Costs of Air Pollution from Motor Vehicles," University of California Transportation Center, Working Papers qt0sx81025, University of California Transportation Center.
  2. Clifford Winston, 1991. "Efficient Transportation Infrastructure Policy," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 113-127, Winter.
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