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on Transport Economics |
| By: | Börjesson, Maria (KTH); Eliasson, Jonas (KTH); Lundberg, Mattias |
| Abstract: | Cost-benefit analysis (CBA) is often used when many transport investments need to be ranked against each other, for example in national investment planning. However, results are often questioned on claims that the ranking depends crucially on uncertain assumptions about the future, and on methodologically or ethically contestable trade-offs of different types of benefits relative to each other. This paper explores the robustness of CBA rankings of transport investments with respect to two types of uncertainties: relative benefit valuations and scenario assumptions related to car ownership, characteristics and costs. The study is based on CBAs of 479 suggested road and rail investments in Sweden that have been shortlisted for possible inclusion in the national transport investment plan. The CBA ranking turns out to be robust to variations in the studied scenario assumptions. The CBA ranking also turns out to be robust to changes in the relative valuations of different types of benefits – person travel time savings, traffic safety, emissions and freight benefits. We also compare two sets of travel time valuations against each other, one of which differentiated with respect to mode and travel purpose and one which is not, again concluding that the investment ranking is robust. |
| Keywords: | Cost benefit analysis; Appraisal; Robustness; Decision support. |
| JEL: | R41 R48 |
| Date: | 2012–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2012_030&r=tre |
| By: | Manchala, Ravibabu; Vagvala, Phani Sree |
| Abstract: | National Urban Transport Policy, the guiding document for urban transport in India, emphasis movement of people and goods and not vehicles. The paper establishes that investment on walking and cycling facilities, and surface rail projects give maximum benefit compared to high cost motorised transport and metro rail. From past studies the paper also brings out that share of cycling and walking is very high – varying between 58 and 30 % in different cities. The paper identifies that contrary to benefits accrued and usage patterns, analysis of investment - both past and future projections, shows that metro rail and road development projects are preferred crowding out the other investment. The paper also identifies the reasons for distortion by identifying various groups working in the policy and their distorted perception on urban transport development. Finally the paper recommends increased investment in non motorised facilities by retrieving road space. To facilitate investment in surface rail it is necessary that Ministry of Railways, Ministry of Urban Development and Planning Commission should jointly work out the strategies. The study also recommends recasting of academic programs in urban transport to make them multi disciplinary and policy oriented. |
| Keywords: | Urban transport; Non motorised transport; Public transport; Metro rail; Cycling and walking |
| JEL: | L91 L98 R41 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22874&r=tre |
| By: | Hultkrantz, Lars (Department of Business, Economics, Statistics and Informatics); Krüger, Niclas (Swedish National Road and Transport Institute); Mantalos , Panagiotis (Department of Business, Economics, Statistics and Informatics) |
| Abstract: | We modify a method recently suggested by Martin Weitzman (2012) for determining a risk-adjusted social discount rate (SDR) term structure consistent with both the (augmented) Ramsey rule and the consumption-based CAPM. Using this approach we estimate SDR for transportation infrastructure investments based on an analysis of correlations between transportation work, split on road and rail, and passenger travel and freight transport, and GDP in Sweden 1950-2011. We show that this can be estimated from two time-series following a random walk with drift, even if they are not co-integrated. Based on current estimates of the risk-free rate and the equity risk premium, we estimate the relevant SDR to be 5-6 percent, possibly somewhat lower for investment in railroads for passenger travel, and only slowly declining within the investment horizon. This is higher than the current rates used in, for instance, Sweden, Germany and the UK. |
| Keywords: | Ramsey rule; CAPM; cost-benefit |
| JEL: | D61 H43 L91 |
| Date: | 2012–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2012_014&r=tre |
| By: | Eliasson, Jonas (KTH); Amelsfort, Dirk van (WSP Analysis & Strategy); Börjesson, Maria (KTH); Brundell-Freij, Karin (WSP Analysis & Strategy); Engelson, Leonid (WSP Analysis & Strategy) |
| Abstract: | This paper compares forecasted effects of the Stockholm congestion charges with actual outcomes. The most important concerns during the design of the congestion charging scheme were the traffic reduction in bottlenecks, the increase in public transport ridership, the decrease of vehicle kilometres in the city centre, and potential traffic effects on circumferential roads. Comparisons of forecasts and actual outcomes show that the transport model predicted all of these factors well enough to allow planners to draw correct conclusions regarding the design and preparations for the scheme. The one major shortcoming was that the static assignment network model was unable to predict the substantial reductions of queuing times. We conclude that the transport model worked well enough to be useful as decision support, performing considerably better than unaided “experts’ judgments”, but that results must be interpreted taking the model’s limitations into account. The positive experiences from the Stockholm congestion charges hence seem to be transferable to other cities in the sense that if a charging system is forecasted to have beneficial effects on congestion, then this is most likely true. |
| Keywords: | Forecast accuracy; Congestion pricing; Model validation; Policy transfer. |
| JEL: | R41 R48 |
| Date: | 2012–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2012_031&r=tre |
| By: | Sergejs Gubins (VU University Amsterdam); Erik T. Verhoef (VU University Amsterdam) |
| Abstract: | We consider a monocentric city where a traffic bottleneck is located at the entrance of the central business district. The commuters' choices of the departure times from home, residential location, and lot size, are all endogenous. We show that elimination of queuing time under optimal road pricing induces individuals to spend more time at home and to have larger houses, causing urban sprawl. This is opposite to the typical results of urban models with static congestion, which predict cities to become denser with road pricing. |
| Keywords: | dynamic traffic congestion; urban equilibrium; road pricing; bottleneck model; monocentric model |
| JEL: | D62 R21 R41 R48 |
| Date: | 2012–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20120137&r=tre |
| By: | Manchala, Ravibabu; Vagvala, Phani Sree |
| Abstract: | Objective Emerging economies like India are investing heavily in rapid development of urban transport infrastructure for public transport. Though the initial efforts started with three modes - metro rail, Bus Rapid Transit (BRT) and surface rail; currently investments are being made mainly in metro rail and BRT. In spite of lack of patronage, surface rail, which helped develop many cities in India, is playing a prominent role in movement of urban commuters. The objective of research is to assess the viability of surface rail for movement of urban commuters in comparison to metro rail and BRT. To achieve this objective research questions asked were: • How do cost, capacity and cost per unit capacity compare between metro rail, surface rail and BRT systems? • What is the current urban form of Indian cities and policy framework to accommodate future urbanisation? • What does this imply for planning of public transport? • Can the surface rail serve the city core in addition to serving the peripheral areas? If so, what should be the planning strategies for the surface rail systems? • What are the implications for public transport in India and can the BRT, metro rail and surface rail be symbiotically combined to generate a more purposeful and distinct public transport for Indian UAs? If so, what are the investment implications? • If the answer to the above is affirmative, what policy measures are required to integrate surface rail into transit systems of Indian UAs? Methodology The methodology adapted was : • Comparative assessment of cost, capacity and cost per unit capacity for the three modes which established that cost per unit capacity for surface rail is one twentieth of metro and one fourth of BRT • Review of urbanisation trends and policies • Finally, review of rail network in the 50 urban agglomerations (UAs) with population more than million to see the extent of rail network serving them and whether it can serve the core city. Results The results indicate that during the 12th plan 747 kilometres (kms) of metro rail and 989 kms of regional rail systems are being developed to serve 10 large UAs. As against this, by reallocation of the resources a more elaborate urban rail network of 6628 kms can be upgraded and 3000 kms of new system can be added in all the 49 UAs. Another major finding is the hidden benefits given to metro rail compared to surface rail systems. Implications for Policy Immediate policy implication is to undertake surface rail development on priority before metro rail development is taken up. Policy implication would be to set up an institutional mechanism for fast development of surface rail. This would be possible if apex policy making bodies of Ministry of Urban Development (MoUD) for urban transport, Ministry of Railways (MoR) for surface rail and the Planning Commissions jointly review and formulate guidelines for surface rail and metro rail projects. This would facilitate concerted action for development of surface rail at all levels. |
| Keywords: | Surface rail; urban transit; Bus rapid transit; Metro rail; Urban Agglomerations; India |
| JEL: | R40 R42 R41 R48 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43357&r=tre |
| By: | Andersson, Mats (Swedish Transport Agency); Björklund, Gunilla (VTI) |
| Abstract: | In this paper, renewal costs for railway tracks are investigated using survival analysis. The purpose is to derive the effect from increased traffic volumes on rail renewal cycle lengths and to calculate associated marginal costs. A flow sample of censored data containing almost 1 300 observations on the Swedish main railway network is used. We specify Weibull accelerated failure time regression models, and estimate deterioration elasticities for total tonnage as well as for passenger and freight tonnages separately. Marginal costs are calculated as a change in present values of renewal costs from premature renewal following increased traffic volumes. The marginal cost for aggregate freight and passenger tonnage is estimated to approximately SEK 0.002 per gross ton kilometre. |
| Keywords: | Railway; Renewal; Survival analysis; Marginal costs |
| JEL: | C41 H54 L92 R48 |
| Date: | 2012–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2012_029&r=tre |
| By: | Hultkrantz, Lars (Department of Business, Economics, Statistics and Informatics) |
| Abstract: | High-Speed Rail (HSR) is designed for travelers with high value of time. HSR offer fast and reliable services and good possibilities for work during the journey. Surprisingly, these benefits of HSR investment proposals are often appraised by use of travel-time valuations of people who use conventional (intercity) train services. The standard approach builds on two major assumptions, linearity of demand, and that the value of time is unchanged between the “before” and “after” alternatives, i.e., that change in the average value of time of passengers can be ignored. While the first of these is well known, the second is not always observed. However, the spread of values of time between individual travelers is large and is an essential motivation for HSR investments. This note therefore considers whether the assumption that the value of time remains unchanged by the speed improvement induces any significant bias in the appraisal. We first use a modal-mix model where travelers have varying value of time to outline some conceptual points and then discuss to what extent these may affect the social profitability of three recently constructed or proposed HSR lines: Oslo- Stockholm (Norway and Sweden), Stockholm-Göteborg (Sweden) and Beijing-Shanghai Hongqiao (China). We conclude that a RoHbased evaluation of an HSR line should be complemented by a sensitivity analysis of how the outcome is affected by possible changes of the composition of travelers with different values of time. |
| Keywords: | Cost-benefit analysis; rule-of-a-half; high-speed rail |
| JEL: | D61 H43 L92 |
| Date: | 2012–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2012_013&r=tre |
| By: | Vaz, Margarida; Silva, Jorge; Baltazar, Emília; Marques, Tiago; Reis, Tiago |
| Abstract: | The performance of an airport and its efficiency has been measured generally from its operational and financial data, and on that basis, classified its relative position in the set of airports. But this methodology, by itself, is insufficient to determine relationships between a given position in the ranking of an airport and the generated value associated with that position, either within the entire business system of the airport or along the inter-relationships that it establishes with the surrounding community. We argue that networks are fundamental instruments for the development of the business system of airport’s landside areas. Applying the Value Network Analysis (VNA) to the Air Cargo we concluded that this approach provided a network ecosystem perspective into how processes and people create value within the Cargo Network. |
| Keywords: | airport’s landside areas; business systems; air cargo network; social network analysis; value network analysis |
| JEL: | L93 P25 R41 |
| Date: | 2012–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43232&r=tre |
| By: | Morris Davis (University of Wisconsin-Madison, School); Jonas Fisher (Federal Reserve Bank of Chicago); David Wasshausen (BEA); Jennifer Bennett (BEA) |
| Abstract: | Infrastructure capital, the structures and equipment that comprise "the basic systems that bridge distance and bring productive inputs together" (Cisneros 2010), is a vital input into the productive capacity of any economy. It is often claimed that the US fails to invest sufficiently in its own infrastructure. Is this true? We introduce new data and a theoretical framework to address this and related questions. Our data consist of new measures of the price and quantity of transportation, communication, and energy infrastructure in the United States over the1929-2011 period. We show that the real price of infrastructure capital has been rising steadily over time; and, the replacement cost of the infrastructure capital stock has not kept pace with GDP for the past 60 years. Using the neoclassical growth model, we estimate the impact of additional infrastructure investment on private sector productivity and assess the effectiveness of infrastructure spending as a tool of fiscal stimulus. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed012:220&r=tre |
| By: | Daniel Albalate (Faculty of Economics, University of Barcelona); Germà Bel (Faculty of Economics, University of Barcelona); R. Richard Geddes (Department of Policy Analysis & Management, College of Human Ecology, Cornell University) |
| Abstract: | Reliance on private partners to help provide infrastructure investment and service delivery is increasing in the United States. Numerous studies have examined the determinants of the degree of private participation in infrastructure projects as governed by contract type. We depart from this simple public/private dichotomy by examining a rich set of contractual arrangements. We utilize both municipal and state-level data on 472 projects of various types completed between 1985 and 2008. Our estimates indicate that infrastructure characteristics, particularly those that reflect “stand alone” versus network characteristics, are key factors influencing the extent of private participation. Fiscal variables, such as a jurisdiction’s relative debt level, and basic controls, such as population and locality of government, increase the degree of private participation, while a greater tax burden reduces private participation.. |
| Keywords: | Privatization, Contracting, Infrastructure, Risk transfer. JEL classification: H4; H54; H7; L88; L9 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201220&r=tre |
| By: | Daniel Wilson (Federal Reserve Bank of San Francisco); Sylvain Leduc (Federal Reserve Bank of San Francisco) |
| Abstract: | We examine the dynamic macroeconomic effects of public infrastructure investment both theoretically and empirically, using a novel data set we compiled on various highway spending measures. Relying on the institutional design of federal grant distributions among states, we construct a measure of government highway spending shocks that captures revisions in expectations about future government investment. We find that shocks to federal highway funding has a positive effect on local GDP both on impact and after 6 to 8 years, with the impact effect coming from shocks during (local) recessions. The direct channel appears to stem from federal grants leading to increased state government spending, and we provide strong evidence of this "flypaper effect." |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed012:210&r=tre |
| By: | Daniel Albalate (Faculty of Economics, University of Barcelona); Germà Bel (Faculty of Economics, University of Barcelona); Xavier Fageda (Faculty of Economics, University of Barcelona) |
| Abstract: | increasing trend in airports. The literature has not paid enough attention to the mixed management models in this industry, although many European airports take the form of mixed firms or Institutional PPP, where ownership is shared between public and private sectors. We examine the determinants of the degree of private participation in the European airport sector. Drawing on a sample of the 100 largest European airports we estimate a multivariate equation in order to determine the role of airport characteristics, fiscal variables and political factors on the extent of private involvement. Our results confirm the alignment between public and private interests in PPPs. Fiscal constraints and market attractiveness promote private participation. Integrated governance models and the share of network carriers prevent the presence of private ownership, while the degree of private participation appears to be pragmatic rather than ideological. |
| Keywords: | Partial Privatization, Mixed Firms, Airports. JEL classification: H4; H54; H7; L88; L9 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201221&r=tre |
| By: | Holmberg, Pär (Research Institute of Industrial Economics (IFN)); Philpott, Andrew (Department of Engineering Science) |
| Abstract: | Transport constraints limit competition and arbitrageurs' possibilities of exploiting price differences between goods in neighbouring markets, especially when storage capacity is negligible. We analyse this in markets where strategic producers compete with supply functions, as in wholesale electricity markets. For networks with a radial structure, we show that existence of supply function equilibria (SFE) is ensured if demand shocks are suffciently evenly distributed, and solve for SFE in symmetric radial networks with uniform multi-dimensional nodal demand shocks. An equilibrium offer in such networks is identical to an SFE offer in an isolated node where the symmetric number of firms has been scaled by a market integration factor, the expected number of nodes that are completely integrated with a node in the symmetric network. The analysis can be extended to mesh networks (as in electricity systems) although the resulting models do not simplify as in the radial case. |
| Keywords: | Transmission network; Graph theory; Market integration; Wholesale electricity markets |
| JEL: | C72 D43 D44 L91 |
| Date: | 2012–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0945&r=tre |
| By: | Pavlyuk, Dmitry |
| Abstract: | During the last two decades the European airport industry is liberalised and turned to competitive market environment. This fact attracts an increasing scientific and practical interest to analysis of airport efficiency and its determinants, as well as different aspects of airport competition. This paper contains a critical review of existing researches in these two areas – airport efficiency and spatial competition among airports. We analysed modern approaches to airport benchmarking, their advantages and shortcomings, and systematised a wide range of related academic studies. We paid special attention to empirical researches of spatial competition as a factor affecting airport efficiency. Despite the fact of a well-developed theory of spatial competition and signs of its growing effects in the airport industry, we discovered a lack of studies devoted to the relationship between airport efficiency and spatial competition. |
| Keywords: | airport efficiency; benchmarking; spatial competition |
| JEL: | L93 D24 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43391&r=tre |
| By: | Diane Paulsell; Margaret Hargreaves; Brandon Coffee-Borden; Kimberly Boller |
| Keywords: | EBHV, Evidence-Based Home Visiting, Infrastructure Building Plans, Early Childhood |
| JEL: | I |
| Date: | 2012–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:7619&r=tre |
| By: | Nistor, Filip |
| Abstract: | The container-shipping industry's poor performance in 2011 and its continued struggles in 2012 are primarily the result of supply and demand imbalance, which triggered intense competition and price wars. Some carriers have begun to recognize the importance of alliances, as reflected by their expanded efforts to collaborate during the past year. This article present how the global rates in container industry had dropped as the carriers added ships in anticipation of an economic recovery, causing overcapacity. Container lines began cutting capacity and raising rates to restore profitability. The article conclude that a way of avoiding for container-shipping lines maritime market fluctuations and increasing opportunities of success in the event of a fierce competition is a strategic alliance. |
| Keywords: | container; alliance; profit; rate |
| JEL: | D74 N70 R41 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43157&r=tre |
| By: | Nikita Roketskiy (New York University); Alessandro Lizzeri (New York University); Alessandro Gavazza (New York University) |
| Abstract: | We quantitatively investigate the allocative and welfare effects of secondary markets for cars. Gains from trade in these markets arise because of heterogeneity in the willingness to pay for higher-quality (i.e., newer) goods, but transaction costs are an impediment to instantaneous trade. We explore how the income distribution affects this heterogeneity---income is an important determinant of willingness to pay for quality. Calibration of the model matches several aggregate features of U.S. and French used-car markets well. Counterfactual analyses show that transaction costs have a large effect on volume of trade, allocations, and the primary market, but small effects on consumer surplus and welfare. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed012:173&r=tre |
| By: | Roy, Debjit; Sebastian, Joesph |
| Abstract: | We develop a quick and approximate way to address the fleet sizing problem for transporters with non-stationary demands and uncertain trip times. Non-stationary demands are modeled using Markov-modulated Poisson process (MMPP) and the variable fleet size is modeled using multi-server queuing construct (MMPP(2)=M=C queue). The customer service level is expressed by the probability that a customer on arrival waits for availability of trucks. The waiting time probabilities are estimated from the steady-state probabilities, which are obtained from the solution of the continuous-time Markov chain. We demonstrate the fleet-sizing approach for a transporter with two level of demand rates and exponentially distributed truck unavailable times. |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:11467&r=tre |