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on Transport Economics |
| By: | Capozza, Claudia |
| Abstract: | The empirical evidence shows that travel time is crucial for rail transport to be a competitor to air transport. However, there are no papers testing whether travel time has a direct effect on airline pricing. This paper is a step towards filling this gap. We test and quantify the effect of rail travel time on airline fares, using unique data at flight-level. We find that airlines design pricing strategies taking into consideration the travel time of competing rail transport service. Airlines are found to set, on average, higher fares as rail travel time increases. However, the competitive pressure induced by rail travel time is perceived by airlines only as the day of departure gets closer: from the 30th to the day before departure it increases while it gradually decreases as the departure date gets further away. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:sit:wpaper:15_03&r=tre |
| By: | Jussila Hammes , Johanna (VTI ); Nilsson, Jan-Eric (VTI ) |
| Abstract: | The choice of transport infrastructure projects to include in the National Transport Infrastructure Plans in Sweden is often said to be motivated by the weighing of cost against social benefits. Examining the projects that are included in the Plans, it is clear, however, that not all projects have positive net present values, and are therefore more costly to build than the benefits they create. This paper studies alternative models that might explain the choice of projects. Two political economy models, the district demand and the swing voter with lobbying, are tested, and a model that accounts for the spatial distribution of the projects, as well as the possibility that priorities are based on welfare concerns, is estimated. No support is found for the political economy models. What explains investment volume is the existence of CBA results for a project, which may indicate that welfare benefits have an impact, as do the spatial spillovers from a project’s benefits and lobbying, especially by the municipalities concerned. |
| Keywords: | Distributive politics; Fiscal federalism; Lobbying; Party competition; Political economy; Transport infrastructure; Spatial analysis; Sweden |
| JEL: | D60 D72 D78 R42 |
| Date: | 2015–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2015_004&r=tre |
| By: | Dupuis, Nicolas ; Ivaldi, Marc ; Pouyet, Jérôme |
| Abstract: | We study the welfare impact of revenue management, i.e. intertemporal price discrimination when the product availability is limited both in time and quantity, and consumers' arrival is random. This practice is particularly relevant, and widely spread, in the transport industry, but little is known about its implications on profits and consumer surplus. We develop a theoretical model of revenue management allowing for heterogeneity in product characteristics, capacity constraints, consumer preferences, and probabilities of arrival. We also introduce dynamic competition between revenue managers. We solve this model computationally and recover the optimal pricing strategies. We find that revenue management is welfare enhancing. Revenue managers face two types of constraints: a limited booking period and fixed capacities. Previous sales affect the relative slackness of these two constraints, explaining price variations. Profits increase as the practice offers more leeway to the seller compared to posting a fixed price throughout the booking period. Total consumer surplus also increases for a wide range of specifications, as revenue management raises the number of sales. In the presence of heterogeneous consumers, consumers with low price sensitivity subsidize ones with high price sensitivity when demand is low but both types benefit from the practice when demand is high. This sheds some light on the impact of revenue management on the surplus of business and leisure passengers. |
| Keywords: | dynamic computational models; intertemporal price discrimination; revenue management; transport fares |
| JEL: | C63 R41 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10385&r=tre |
| By: | Francesconi, Marco (University of Essex ); James, Jonathan (University of Bath ) |
| Abstract: | We estimate the effect of binge drinking on accident and emergency attendances, road accidents, arrests, and the number of police officers on duty using a variety of unique data from Britain and a two-sample minimum distance estimation procedure. Our estimates, which reveal sizeable effects of bingeing on all outcomes, are then used to monetize the short-term externalities of binge drinking. We find that these externalities are on average £4.9 billion per year ($7 billion), about £80 for each man, woman, and child living in the UK. The price that internalizes this externality is equivalent to an additional 9p per alcoholic unit, implying a 20% increase with respect to the current average price. |
| Keywords: | alcohol, health, road accidents, arrests, externalities |
| JEL: | I12 I18 K42 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8849&r=tre |
| By: | Jacobsen, Mark |
| Keywords: | Architecture, Arts and Humanities, Education, Engineering |
| Date: | 2014–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:uctcwp:qt3fx8p8q7&r=tre |
| By: | Sebastien Pouliot (Center for Agricultural and Rural Development (CARD) ); Bruce A. Babcock (Center for Agricultural and Rural Development (CARD) ) |
| Abstract: | Past studies that examine the impact of ethanol mandates on fuel prices make the assumption that ethanol and gasoline are perfect substitutes because they are both sources of energy in transportation fuels. These studies, however, have been of limited use in informing current policy debates because the short- to medium-run reality is one of strong regulatory and infrastructure rigidities that restrict how ethanol can be consumed in the United States. Our objective here is to improve understanding of how these rigidities change the findings of existing studies. We accomplish this by estimating the impacts of higher ethanol mandates using a new open-economy, partial equilibrium model of gasoline, ethanol, and blending whereby motorists buy one of two fuels: E10, which is a blend of 10 percent ethanol and 90 percent gasoline, or E85 which is a high ethanol blend. The model is calibrated to recent data to provide current estimates. We find that the effects of increasing ethanol mandates that are physically feasible to meet on the price of E10 are close to zero. This result is robust to different gasoline supply elasticities and gasoline export demand elasticities. The impact of the size of the corn harvest on E10 prices is much larger than the effects of mandates. Increased mandates can have a large effect on the price of E85 if the mandates are increased to levels that approach consumption capacity. These findings show that concern about the consumer price of fuel do not justify a reduction in feasible ethanol mandates. |
| Keywords: | Biofuel, Ethanol, Gasoline, Mandate. JEL codes: Q18, Q41, Q42. |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:14-wp551&r=tre |
| By: | Roberto Ramos (Bank of Spain ); Manuel García-Santana (ECARES ); Jose Asturias (Georgetown University ) |
| Abstract: | We investigate the role of transportation infrastructure in explaining resource misallocation and income in India. We extend the endogenous variable markups model by Atkeson and Burstein (2008) into a multi-region setting in which asymmetric states trade with each other. High transportation costs that result from poor infrastructure quality generate misallocation of resources by increasing dispersion in market power across firms. Using a rich micro-level dataset constructed from manufacturing and geospatial data, we find preliminary evidence that is consistent with our theory. Using the construction of the Golden Quadrilateral as a natural experiment, we find that prices declined by 20% in districts crossed by this road. We calibrate the model and simulate an improvement in Indian road quality. We find the aggregate gains for improved road quality. We also decompose these gains into Ricardian and pro-competitive components. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed014:1035&r=tre |
| By: | David Banister ; Philippe Crist ; Stephen Perkins |
| Abstract: | “Green growth” and transport combines several different concepts that are central to sustainable mobility, including sustainable economic activity, reduced environmental impact and sustained growth in high quality jobs. It attempts to balance the importance of economic growth, with environmental damage and social priorities through assessing positive actions that can be taken by a wide variety of public and private stakeholders. It has arisen out of the concern over the use of non-renewable resources in transport, increasing emissions of carbon and other pollutants, and the expected levels of growth in mobility over the next 40 years. But it also acknowledges the importance of transport to the economy, and its role in helping to create jobs, improving levels of productivity and output, and in promoting agglomeration benefits. This means that transport should be efficient, but at the same time make less demand on the environment through less use of resources, through recycling and reuse of materials, and through embracing a life cycle perspective... |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envddd:2015/1-en&r=tre |
| By: | Gayle, Philip ; Brown, Dave |
| Abstract: | When there is significant overlap in potential partner airlines' route networks, policymakers have expressed concern that an alliance between such airlines may facilitate collusion on price and/or service levels in the partners' overlapping markets. The contribution of our paper is to put together a structural econometric model that is able to explicitly disentangle the demand and supply effects associated with an alliance between such airlines. The estimates from our structural econometric model do identify demand-increasing effects associated with the Delta/Continental/Northwest alliance, but statistically reject collusive behavior between the partners. |
| Keywords: | Codeshare Alliance; Collusion; Airline Competition; Discrete Choice Demand Model; Nested Logit |
| JEL: | L13 L40 L93 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:62355&r=tre |
| By: | Bishop, James |
| Abstract: | This paper is the first to combine data from large nationwide surveys to investigate how commuting and work hours affect sleep. I estimate that 11-21\% of the marginal unit of time spent working and 22-30\% of the marginal unit of time spent commuting replace sleep. Controlling for these effects, commuting before 5 a.m. and after 9 a.m. each increase the likelihood of short sleep. I also find that time spent commuting and working and the prevalence of these strange commute times each contribute to unintentionally falling asleep at some time during the day, while early commuting in particular increases the likelihood of falling asleep while driving. Little of these effects are explained by reduced time spent sleeping, indicating that there are multiple biological channels through which commuting duration and timing impact road safety. None of these effects appear for non-workers as opposed to the employed, supporting the validity of the results. Overall, most of the effects are stronger for women than for men, though the prevalence of early commutes is particularly associated with less sleep among men. |
| Keywords: | Commuting; Sleep; Time Allocation; Gender |
| JEL: | I15 J16 R41 |
| Date: | 2015–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:62162&r=tre |
| By: | Zhe Yu ; Shanjun Li ; Lang Tong |
| Abstract: | The diffusion of electric vehicles (EVs) is studied in a two-sided market framework consisting of EVs on the one side and EV charging stations (EVCSs) on the other. A sequential game is introduced as a model for the interactions between an EVCS investor and EV consumers. A consumer chooses to purchase an EV or a conventional gasoline alternative based on the upfront costs of purchase, the future operating costs and the availability of charging stations. The investor, on the other hand, maximizes his profit by deciding whether to build charging facilities at a set of potential EVCS sites or to defer his investments. The solution of the sequential game characterizes the EV-EVCS market equilibrium. The market solution is compared with that of a social planner who invests in EVCSs with the goal of maximizing the social welfare. It is shown that the market solution underinvests EVCSs, leading to slower EV diffusion. The effects of subsidies for EV purchase and EVCSs are also considered. |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1502.03840&r=tre |
| By: | Schofer, Joseph ; Chan, Raymond |
| Keywords: | Architecture, Arts and Humanities, Engineering, Social and Behavioral Sciences |
| Date: | 2014–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:uctcwp:qt6091n47w&r=tre |
| By: | Burlando, Alfredo ; Cristea, Anca D. ; Lee, Logan M. |
| Abstract: | In the past decade, pirates from Somalia have carried out thousands of attacks on cargo ships sailing through the Gulf of Aden and the Indian Ocean, causing what others have identified as significant damage to maritime trade. In this paper, we use variations in the spread and intensity of Somali piracy to estimate its effect on the volume of international trade. By comparing trade volume changes along shipping routes located in pirate waters to those that are not, we estimate that Somali piracy reduced bilateral trade passing through the Gulf of Aden by 1.7-1.9 percent per year from 2000 to 2010. In addition, we find larger reductions for trade in bulk commodities, which are generally shipped by sea and are more likely to fall prey to piracy attacks. While our estimates suggest that the trade costs of piracy are much lower than what has been suggested in the existing literature, we find that they remain significant and unevenly distributed, with five countries and the European Union shouldering 70% of the total costs. |
| Keywords: | Bulk Trade; Gravity equations; International Trade; Maritime Piracy; Somali Pirates; Trade shocks; Transportation |
| JEL: | F1 F14 R4 |
| Date: | 2014–10–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61934&r=tre |
| By: | Zahran, Sammy ; Iverson, Terrence ; McElmurry, Shawn ; Weilar, Stephan |
| Abstract: | Lead is a neurotoxin with developmentally harmful effects in children. In the United States, over half of the current flow of lead into the atmosphere is attributable to lead-formulated aviation gasoline (avgas), used in a large fraction of piston-engine aircraft. Deposition of lead from avgas may pose a health risk to children proximate to airport facilities that service lead-emitting aircraft. Extrapolating from epidemiological evidence on the health and human capital costs of lead poisoning, various public interest firms have petitioned the EPA to find endangerment from and regulate lead emitted by piston-engine aircraft. In the absence of sufficient empirical evidence linking avgas to blood lead levels (BLLs) in children, the EPA has ruled against petitions to find endangerment. To address an EPA request for more evidence, we constructed a novel dataset that links time and spatially referenced blood lead data from 1,043,391 children to 448 nearby airports in Michigan, as well as a subset of airports with detailed data on the volume of piston-engine aircraft traffic. Across a series of tests, and adjusting for other known sources of lead exposure, we find that child BLLs: 1) increase dose-responsively in proximity to airports, 2) decline measurably in children residing in neighborhoods proximate to airports in the months after 9-11, and 3) increase dose-responsively in the flow of piston-engine aircraft traffic. To quantify the policy relevance of our results, we provide a conservative estimate of the social damages attributable to avgas consumption. |
| Keywords: | Child Health; Lead Exposure; Blood Lead Levels; Aviation Gasoline |
| JEL: | I12 I18 J13 Q51 Q53 |
| Date: | 2014–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:62238&r=tre |
| By: | Coglianese, John ; Davis, Lucas W ; Kilian, Lutz ; Stock, James H |
| Abstract: | Traditional least squares estimates of the responsiveness of gasoline consumption to changes in gasoline prices are biased toward zero, given the endogeneity of gasoline prices. A seemingly natural solution to this problem is to instrument for gasoline prices using gasoline taxes, but this approach tends to yield implausibly large price elasticities. We demonstrate that anticipatory behavior provides an important explanation for this result. We provide evidence that gasoline buyers increase gasoline purchases before tax increases and delay gasoline purchases before tax decreases. This intertemporal substitution renders the tax instrument endogenous, invalidating conventional IV analysis. We show that including suitable leads and lags in the regression restores the validity of the IV estimator, resulting in much lower and more plausible elasticity estimates. Our analysis has implications more broadly for the IV analysis of markets in which buyers may store purchases for future consumption. |
| Keywords: | Anticipation; Forward-looking behavior; Gasoline market; Gasoline tax; IV; Price elasticity of demand |
| JEL: | C23 Q41 Q43 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10430&r=tre |