Most Cited Economics of Transportation Articles
The most cited articles published since 2011, extracted from Scopus.
Valuation of travel timeKenneth A. Small
Volume 1, Issues 1-2, December 2012, Pages 2-14
After decades of study, the value of travel time remains incompletely understood and ripe for further theoretical and empirical investigation. Research has revealed many regularities and connections between willingness to pay for time savings and other economic factors including time of day choice, aversion to unreliability, labor supply, taxation, activity scheduling, intra-household time allocation, and out-of-office productivity. Some of these connections have been addressed through sophisticated modeling, revealing a plethora of reasons for heterogeneity in value of time rooted in behavior at a micro scale. This paper reviews what we know and what we need to know. A recurrent theme is that the value of time for a particular travel movement depends strongly on very specific factors, and that understanding how these factors work will provide new insights into travel behavior and into more general economic choices. © 2012 Elsevier Ltd.
Airline competition and domestic US airfares: A comprehensivereappraisalJan K. Brueckner | Darin Lee | Ethan S. Singer
Volume 2, Issue 1, March 2013, Pages 1-17
This paper extends recent research on the fare impacts of low-cost carriers, incorporating its adjacent-airport approach to offer a comprehensive picture of the competitive effects of both legacy carriers and low-cost carriers. The analysis measures the impact of in-market (i.e., airport-pair) competition and adjacent competition for both types of carriers, while also capturing the impact of potential competition from low-cost carriers. Moreover, this comprehensive approach is applied separately to two different types of markets, nonstop and connecting, which have not been simultaneously treated before within a single study. The results show that most forms of legacy-carrier competition have weak effects on average fares. Low-cost carrier competition, on the other hand, has dramatic fare impacts, whether it occurs on the airport-pair, at adjacent airports, or as potential competition. © 2012 Elsevier Ltd.
Airports and airlines economics and policy: An interpretive review of recent researchAnming Zhang | Achim I. Czerny
Volume 1, Issues 1-2, December 2012, Pages 15-34
This paper provides an interpretive review of recent research, concentrating on three areas where new and important insights have been derived during the last years. We present the main ideas in a general unifying framework-there is somewhat more emphasis on a unifying analytical structure, as well as a sufficiently detailed algebraic treatment, of each topic area than in most other surveys. The part on "airport congestion and pricing" is a natural sequel of the survey paper by Basso and Zhang (2007), who concentrated on theoretical airport pricing studies. We have the obvious opportunity to include more recent material, leading to a more complete guide to the literature. Similarly, the part on "airline alliances" contains up-to-date research on alliance modeling and policy. The part on "airport privatization and regulation" has not been covered by other surveys before. We also elaborate important avenues for future research. © 2012 Elsevier Ltd.
Energy and environment challenges in the transport sectorStef Proost | Kurt Van Dender
Volume 1, Issues 1-2, December 2012, Pages 77-87
This paper discusses the economics of three environmental and energy issues in transport: local air pollution, energy supply and climate change. The focus is on road transport as the dominant transport mode. The application of the main environmental instruments is briefly discussed for local air pollution. For energy supply and climate change we analyze a wider set of instruments including import taxes, steering modal choice, new vehicle technologies and land use policies. © 2012 Elsevier Ltd.
The economics of cordon tolling: General equilibrium and welfare analysisAlex Anas | Tomoru Hiramatsu
Volume 2, Issue 1, March 2013, Pages 18-37
We study optimal cordon tolling in a general equilibrium model of the Chicago MSA. Adjustments in travel, housing and labor markets blunt the toll's impact. Residence relocations drive job relocations and vice versa. The outflow of jobs and residences out of the cordoned area is checked by switches to public transit. Higher output outside the cordon exceeds output losses within the cordon and total real and nominal gross MSA product rises. Optimal downtown and City cordons achieve up to 65% of the gains from Pigouvian pricing on all major roads, but 50% of these gains can be from annualized real estate value increases. In the case of an outer cordon encircling the inner suburbs, toll-avoidance causes jobs, residences and real output to increase within the cordon. Such outer cordons though less efficient in pricing congestion can concentrate activity toward the centers an issue that was inconclusively debated 20 years ago. © 2012 Elsevier Ltd.
Public versus private airport behavior when concession revenues existAchim I. Czerny
Volume 2, Issue 1, March 2013, Pages 38-46
The share of revenues from airport concession services among airports worldwide has reached an average level of roughly 50% today. Since concessions may exert downward pressure on the private aeronautical charge, the question is whether price regulation of private airports has become obsolete. The recent literature on airport concessions suggests that private airport pricing may still be excessive from the social viewpoint. This paper complements this literature by considering (i) two distinct types of concession services called retail services and car rentals, (ii) two-sided demand complementarity between aeronautical and concession services, and (iii) specific airport concession services that are welfare neutral in the sense that the surplus derived from concession services is independent of traveling activities. In this setting, airport price regulation can become obsolete, but concession services of the car-rental type can also increase the benefits of airport price regulation. © 2012 Elsevier Ltd.
Transport policy competition between governments: A selective survey of the literatureBruno De Borger | Stef Proost
Volume 1, Issues 1-2, December 2012, Pages 35-48
In this paper, we provide a selective survey of the recent literature that deals with transport policy competition between governments. The paper shows the potential relevance of strategic behaviour by governments in deciding on prices (taxes, tolls) and investment in infrastructure capacity. The severity and the welfare effects of tax exporting behaviour and of horizontal tax and expenditure competition strongly depend on whether the transport links controlled by the different governments are strategic complements or substitutes. The scarce transport economics literature on vertical competition between hierarchical governments has so far mainly focused on the question which government level should be responsible for providing and financing local infrastructure. The survey identifies a number of gaps in the literature that may be useful avenues for further research. These include more detailed analysis of the implications of vertical tax and expenditure competition between hierarchical government levels, a political economy approach to problems of transport decision-making with multiple government levels and, most importantly, more empirical analysis to document the relevance of the theoretical literature. © 2012 Elsevier Ltd.
Road pricing and investmentRobin Lindsey
Volume 1, Issues 1-2, December 2012, Pages 49-63
Traffic congestion is a bane of modern city life. Transportation economists have long supported road pricing as a tool for controlling congestion and the idea is slowly coming into practice. This paper reviews the theory of congestion pricing and the relationship between optimal congestion tolls and optimal road capacity. It is organized around four questions. Is congestion pricing according to marginal-social-cost principles consistent with covering the costs of road infrastructure? How does road pricing affect optimal road capacity? How does road pricing affect optimal public transportation fares and capacity? Do private toll road operators make socially efficient toll and capacity decisions? The paper concludes with an assessment of long-run trends in travel demand and technology that could alter the evolution of traffic congestion and priorities for road pricing and investment. © 2012 Elsevier Ltd.
On the optimal target curbside parking occupancy rateRichard Arnott
Volume 3, Issue 2, January 2014, Pages 133-144
© 2014 Elsevier Ltd. Donald Shoup, following Vickrey, has long advocated cashing out free and underpriced parking. How should this be implemented for curbside parking in practice, considering the stochasticity of curbside parking vacancies? Shoup has proposed adjusting meter rates such that, for each block and time period, a target (average) curbside parking occupancy rate of 85% is achieved. This paper develops a simple structural model of stochastic steady-state curbside parking in an isotropic space, solving for the surplus-maximizing occupancy rate and the corresponding meter rate. By increasing curbside occupancy, a curbside parker imposes a curbside parking externality. The optimal meter rate internalizes this externality. The central comparative static result is that, ceteris paribus, the optimal occupancy and meter rates are higher, the higher is demand relative to curbside parking capacity. This suggests that, in practice, the occupancy rate should be higher in more trafficked locations and at busier times of the day.
The optimal pricing, finance and supply of urban transportation in general equilibrium: A theoretical expositionAlex Anas
Volume 1, Issues 1-2, December 2012, Pages 64-76
We present a general equilibrium framework of optimal allocation treating the pricing, finance and supply of urban transportation. Uncongested public transportation technology with economies of scale supports the city's existence; and a congested road system subject to constant returns limits urban size. Optimal investment in public transit and in roads follow Samuelson's rule. With optimally determined urban population, roads are fully financed by Pigouvian congestion tolls while aggregate differential land rents fully finance public transit and any other activity with internal or external economies of scale (Henry George Theorem). Marshallian agglomeration from production in the core and the suburbanization of jobs to avoid congestion are treated. We also see how the optimal rules and the Henry George Theorem are modified when the demand for location is determined by a random utility model. © 2012 Elsevier Ltd.
Beckmann's transportation network equilibrium model: Its history and relationship to the Kuhn-Tucker conditionsDavid Boyce
Volume 2, Issue 1, March 2013, Pages 47-52
During 1952-54, Martin Beckmann, and his colleagues, formulated a nonlinear programming problem corresponding to behavioral assumptions from the viewpoint of an individual traveler concerning travel demand and cost-minimizing route choice over a congested road network. Their formulation was based on the conditions for a constrained maximum, recently derived by Kuhn and Tucker. This formulation was evidently the first time that economists used the Kuhn-Tucker conditions to formulate a new problem in economics, one of substantial practical importance and consequence, and quite possibly the first to use these conditions to formulate a new, large-scale problem in all fields of engineering. In this paper, an overview of the research leading to the formulation is offered. Then, the derivation presented in their monograph is described and explored in more detail. Finally, the impacts of this model on the field of transportation economics and the associated fields of transportation engineering and regional science are examined. © 2012 Elsevier Ltd.
Road pricing and public transport pricing reform in Paris: Complements or substitutes?Moez Kilani | Stef Proost | Saskia van der Loo
Volume , Issue , May 2014, Page
This paper explores reforms of pricing of private and public transport in Paris. Paris has used a policy of very low public transport prices and no road pricing. The Paris transport network is represented as a stylized concentric city with the choice between car, rapid rail, metro and buses as well as two income classes and different transport motives. The model is used to test what the efficiency gains are of introducing road pricing and of increasing public transit prices in the peak. Are both reforms re-enforcing each other or are they largely substitutes? We find that a zonal pricing scheme for the center of Paris combined with higher public transport fares in the peak perform best. The benefits of an overall capacity extension of public transport supply are much lower than the benefits of pricing reforms and could very well not pass the cost benefit test. © 2014 Elsevier Ltd. All rights reserved.
Residential parking in vibrant city districtsInga Molenda | Gernot Sieg
Volume 2, Issue 4, January 2013, Pages 131-139
Living downtown can be advantageous because it enables convenient access to a variety of shopping and leisure activities, but a major disadvantage is the difficulty of finding a parking spot. We formally model the trade-off between privileged parking for residents and economic vitality in terms of the product variety available in a vibrant city district and identify situations in which assigning on-street parking spaces to residential parking constitutes an optimal policy, both from a welfare and a resident perspective. However, we demonstrate that privileged parking for residents is unlikely to result in a first-best allocation of on-street parking spaces, if an efficient level of economic vitality is to be ensured at the same time. © 2014 Elsevier Ltd.
Cruising-for-parking in congested cities with an MFD representationNikolas Geroliminis
Volume 4, Issue 3, January 2015, Pages 156-165
© 2015 Elsevier Ltd. It has been recently proposed and tested that traffic in large urban regions (neighbourhoods) can be modelled dynamically at an aggregate level, if the neighbourhoods are uniformly congested. By exploiting the insights and the properties of a macroscopic fundamental diagram (MFD), we describe the rush hour dynamically in case of multi-region cities that are not uniformly congested. A cruising-for-parking model is developed that considers the dynamics of different types of vehicles, while travelling towards their destinations or cruising. This model describes the physics of hypercongestion caused by the phenomenon, it shows that cruising-for-parking affects all the users of the system, even those with destinations outside the limited parking region and it provides tools to estimate the direct costs of all users, as these expressed by additional vehicle-hours travelled. Also, it describes the rush hour dynamically while vehicles searching for a spot (properly recognizing that delays are greater when flows are lower, unlike existing economic models).
Competition and service quality: New evidence from the airline industryDaniel Greenfield
Volume 3, Issue 1, January 2014, Pages 80-89
Previous studies examine the relationship between competition and airline service quality by regressing on-time performance on market structure. These studies implicitly assume that market structure is exogenously determined with respect to service quality. To address the likely endogeneity of market structure I employ two distinct instrumental variables. The first is lagged market structure. The second exploits a global airline merger that induced differential variations in market structure across hundreds of airport-pair markets. I find that the effect of competition on airline delays is three times stronger than previous studies suggest. © 2014 Elsevier Ltd.
A review of the economics of parkingEren Inci
Volume 4, Issues 1-2, January 2015, Pages 50-63
© 2014 Elsevier Ltd. This paper reviews the literature on parking with an emphasis on economic issues. Parking is not just one of the most important intermediate goods in the economy; it is also a vast use of land. Many theoretical and empirical papers analyze the quantity and pricing of parking by concentrating on particular aspects of the issue. The aspects covered in this review are cruising for parking, spatial competition, (minimum and maximum) parking requirements, parking pricing and road pricing in the bottleneck model, and temporal-spatial pricing. Various forms of parking, including residential parking, shopping mall parking, and employer-provided parking, are also reviewed before identifying understudied topics that should be on the research agenda.
The competitive effects of firm exit: Evidence from the U.S. airline industryKai Hüschelrath | Kathrin Müller
Volume 2, Issues 2-3, June 2013, Pages 72-85
We study the competitive effects of five liquidations and six mergers in the domestic U.S. airline industry between 1995 and 2010. Applying fixed effects regression models, we find that route exits due to liquidation lead to substantially larger price increases than merger-related exits. Within the merger category, our analysis reveals significant price increases on all affected routes immediately after the exit events. In the medium and long-run, however, realized merger efficiencies and entry-inducing effects are found to be strong enough to drive prices down to pre-exit levels. © 2013 Elsevier Ltd.
Competition between multiproduct airportsValentina Bracaglia | Tiziana D'Alfonso | Alberto Nastasi
Volume 3, Issue 4, January 2014, Pages 270-281
© 2015 Elsevier Ltd. We study airport competition when some types of commercial services, such as car parking or car rental, may be offered at the time of air ticket purchase through the Internet, in order to stimulate aviation demand. We find that airports set a lower aviation charge than they would have levied in the absence of concession services, when they are competing in online offers. Nevertheless, when only one airport pursues online offers, that facility sets a higher aviation charge than it would have levied in the absence of concession services, as long as profits from retail earned at the facility on the day of travel remain low enough. The Nash equilibrium of the game is such that both airports offer concession services online. This is welfare enhancing. Nevertheless, facilities might be caught in a Prisoner[U+05F3]s Dilemma.
Shedding light on the appropriateness of the (high) gasoline tax level in GermanyStefan Tscharaktschiew
Volume 3, Issue 3, January 2014, Pages 189-210
© 2014 Elsevier Ltd. Germany imposes an energy tax of 0.65€/l on gasoline which is one of the highest tax rates across countries. The effective tax is even higher when accounting for the consumption tax levied on top of the energy tax. Answers to the question whether such a high tax level is justified on efficiency grounds would add precious arguments to policy discussion debating the appropriate level of a car driver's tax burden. This paper sheds light on that issue by calculating the optimal gasoline tax in Germany using an optimal tax approach that accounts for gasoline/diesel car substitution and interactions of the gasoline tax with the broader fiscal system. According to the baseline calculation the optimal gasoline tax is 0.96€/l, thus, exceeding the (already high) current tax level by 48%. The corrective tax component exclusively reflecting the externalities associated with car driving contributes 0.64€/l to that optimal level while the positive net effect of the interaction of the gasoline tax with the other distortive taxes in the economy adds another 0.32€/l. Sensitivity analyses reveal that the optimal tax is very unlikely to fall below its current level. Even quite the contrary, the optimal tax rises dramatically (to approximately two times the current rate) when account is taken of the medium/long term EU fuel economy regulation legislation aiming at tightening CO2 emission standards of passenger vehicles. All in all, the present analyses suggest that there is no reasoning on efficiency grounds for adjusting the current gasoline tax downwards given the present practice of mainly levying fuel taxes rather than charging individual car drivers on a distance related basis.
Roads and trade in ColombiaGilles Duranton
Volume 4, Issues 1-2, January 2015, Pages 16-36
© 2014 Elsevier Ltd. I estimate the effect of major roads within and between cities on the level and composition of trade for Colombian cities. I confirm that road distance between cities is a major impediment to trade. In addition, major roads within cities have a large effect on a city[U+05F3]s exports and imports with an elasticity of approximately 0.20 estimated with ols and up to 0.50 with iv. If anything, the effects are stronger for the value than for the weight of exports. I interpret these results as city roads shifting economic activity in cities towards the production of tradable and somewhat lighter goods.
Killing kilos in car accidents: Are external costs of car weight internalised?Jos Van Ommeren | Piet Rietveld | Jack Zagha Hop | Muhammad Sabir
Volume 2, Issues 2-3, June 2013, Pages 86-93
Vehicle weight imposes external costs on a car accident collision partner. In the EU, the external costs through material damage are internalised through obligatory insurance, but this does not hold for the external costs related to injuries and fatalities. We estimate these external costs for the Netherlands for two-vehicle crashes. We find that a 500. kg increase in the weight of the other car increases the probability of a fatality by about 70% over the mean fatality rate, in the same order, but somewhat higher than reported for US. For serious injuries, this effect is about 30%, very close to the results for US. However, because the mean fatality/serious injury rate due to two-vehicle crashes is low in the Netherlands, the annual marginal external costs of car weight are small (€50 per 500. kg) and much smaller than the marginal tax of car weight (up to €800 per 500. kg). © 2013 Elsevier Ltd.
Airline strategic alliances in overlapping markets: Should policymakers be concerned?Philip G. Gayle | Dave Brown
Volume 3, Issue 4, January 2014, Pages 243-256
© 2015 Elsevier Ltd. When there is significant overlap in potential partner airlines[U+05F3] route networks, policymakers have expressed concern that an alliance between such airlines may facilitate collusion on price and/or service levels in the partners[U+05F3] 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.
Hub port competition and welfare effects of strategic privatizationAchim Czerny | Felix Höffler | Se il Mun
Volume 3, Issue 3, January 2014, Pages 211-220
© 2014 Elsevier Ltd. Private operation of port facilities is becoming increasingly common worldwide. We investigate the effect of port privatization in a setting with two ports located in different countries, each serving their home market but also competing for the transshipment traffic from a third region. Each government chooses whether to privatize its port or to keep port operations public. We show that there exist equilibria in which the two governments choose privatization and the national welfare of each port country is higher relative to a situation where ports are public. This is because privatization is a commitment to increase charges relative to public port charges, which allows for a better exploitation of the third region. For some parameter regions, port countries non-cooperatively choose public port operations, while they would be better off if both ports were private. However, customers of the third region are always better off if port operations are public. We further show that the port country with the smaller home market has a relatively strong incentive to choose private port operation.
A re-examination of incumbents' response to the threat of entry: Evidence from the airline industryPhilip G. Gayle | Chi Yin Wu
Volume 2, Issue 4, January 2013, Pages 119-130
Much of the literature on the airline industry identifies a potential entrant to a market based on whether the relevant carrier has presence in at least one of the endpoint airports of the market without actually operating between the endpoints. Furthermore, a potential entrant is often defined as a credible "entry threat" to market incumbents once the potential entrant establishes presence at the second endpoint airport of the market. This paper provides evidence that even when a potential entrant has presence at both endpoint airports of a market, incumbents may not respond to this as an effective "entry threat". Specifically, we find that (1) incumbents lower price by more when the potential entrant has a hub at one or both market endpoints; and (2) incumbents increase rather than lower their price if they have an alliance partnership with the "potential entrant". © 2014 Elsevier Ltd.
Devolution, independence, and the optimal provision of public goodsJ. E. Stiglitz
Volume 4, Issues 1-2, January 2015, Pages 82-94
© 2015 . This paper examines whether two regions should remain together within a fiscal federation, or separate, when their inhabitants have different preferences for publicly provided goods. The paper focuses on trade-offs between returns to scale in the provision of the goods, and the scope to tailor provision to the tastes of the inhabitants in each region. A general model is developed that includes, as special cases, both pure public and publicly provided goods, and regional and national public goods. We show that when there is a choice between public investment and consumption goods, there will, in general, be a bias against public consumption goods unless taxing powers are fully devolved. We provide conditions under which independence may be desirable even when the region contemplating independence is relatively small.