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Efficiency and acceptability of pricing policies and transport investments in distorted economies
KTH, School of Architecture and the Built Environment (ABE), Transport Science, Transport and Location Analysis.
2012 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis contains five papers studying the economic efficiency and political acceptability of road pricing policies and transport investments in distorted economies. Interactions between the transport market and other distorted markets, such as the labor market, can have a large impact on the welfare effect of a road pricing policy or a transport investment. Many road pricing studies therefore try to incorporate effects from other distorted markets in the analysis. Paper I analyzes how the economic efficiency of a road toll in a distorted economy depends on assumptions about the initial tax system. In the road pricing literature, the welfare effect of a road toll is often found to depend on revenue use. Using a simple general equilibrium model paper I shows that the relative efficiency of marginal revenue recycling policies depends more on assumptions regarding inefficiencies in the initial tax system than on the road toll per se. Paper II studies the effect on welfare, equity and labor supply from a road toll in a commuting population with heterogeneous value of time and endogenous labor supply. When explicitly taking into account that commuters have different value of time, the road toll can increase total labor supply even when the revenues are not recycled back to the commuters. The analysis stresses the importance of recognizing traveler heterogeneity when analyzing congestion pricing. Road pricing policies are often characterized by conflicting interests between different stakeholders and different geographical areas. Papers III and IV study the economic efficiency and political acceptability of pricing and investment policies in different institutional and geographical settings. The main contribution of the papers is to explain how political constraints can lead to inefficient tolling strategies. The papers contribute to the existing literature on political acceptability of road pricing by analyzing the conflict and potential trade-off between political acceptability and economic efficiency. A difficulty when assessing the welfare effect of a future transport policy is also that many factors and parameters needed for the analysis are uncertain. Paper V studies the climate benefit of an investment in high speed rail by calculating the magnitude of annual traffic emission reduction required to compensate for the annualized embedded emissions from the construction of the line. The paper finds that to be able to balance the annualized emissions from the construction, traffic volumes of more than 10 million annual one-way trips are usually required, and most of the traffic diverted from other transport modes must come from aviation.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2012. , ix, 26 p.
Series
TRITA-TSC-PHD, 12:003
Keyword [en]
road pricing, transport investment, cost-benefit analysis, tax distortions, transport policies, welfare effects, political economy, acceptability
National Category
Economics Transport Systems and Logistics
Research subject
SRA - Transport
Identifiers
URN: urn:nbn:se:kth:diva-103231ISBN: 978-91-85539-95-6 (print)OAI: oai:DiVA.org:kth-103231DiVA: diva2:559691
Public defence
2012-10-26, F3, Lindstedtsvägen 26, Kungliga Tekniska högskolan, Stockholm, 13:00 (English)
Opponent
Supervisors
Funder
TrenOp, Transport Research Environment with Novel Perspectives
Note

QC 20121010

Available from: 2012-10-10 Created: 2012-10-07 Last updated: 2016-08-15Bibliographically approved
List of papers
1. Evaluating road tolls in the presence of tax distortions: Revenue recycling revisited
Open this publication in new window or tab >>Evaluating road tolls in the presence of tax distortions: Revenue recycling revisited
(English)Manuscript (preprint) (Other academic)
Abstract [en]

A well-known result in the road pricing literature is that the welfare potential of a road toll critically depends on revenue use. Using a simple general equilibrium model we show that the relative efficiency of different revenue recycling policies depends more on assumptions regarding inefficiencies in the initial tax system than on the road toll per se. Without a thorough analysis of the initial tax systemand the political situation surrounding the decision, it might make more sense to analyze the effect of road pricing “as if” the policy instruments in the no-toll situation are chosen on welfare maximizing principles.

National Category
Economics Transport Systems and Logistics
Research subject
SRA - Transport
Identifiers
urn:nbn:se:kth:diva-103233 (URN)
Funder
VinnovaTrenOp, Transport Research Environment with Novel Perspectives
Note

QS 2012

Available from: 2012-10-07 Created: 2012-10-07 Last updated: 2012-10-10Bibliographically approved
2. Labor Market Effects of Congestion Pricing in a Heterogeneous Population
Open this publication in new window or tab >>Labor Market Effects of Congestion Pricing in a Heterogeneous Population
(English)Manuscript (preprint) (Other academic)
Abstract [en]

Do congestion pricing reduce labor supply? Since a congestion charge raises the monetary cost of car commuting, concerns have been raised that the toll may decrease labor supply at the extensive margin in a similar way as an income tax. The paper studies the effect of a congestion charge on welfare, equity and labor supply in a commuting population with heterogeneous value of time and endogenous labor supply. The congestion charge decreases labor supply among commuters who change from car to public transport, but increases labor supply among the remaining car commuters. When explicitly taking into account that commuters have different value of time, aggregate labor supply is found to increase even when the revenues are not recycled back to the commuters. This indicates that a congestion charge by itself does not reduce aggregate labor supply. The analysis hence stresses the importance of recognizing traveler heterogeneity when analyzing congestion pricing.

Keyword
congestion toll; tax distortions; welfare effects; equity; labor supply; revenue recycling
National Category
Economics Transport Systems and Logistics
Research subject
SRA - Transport
Identifiers
urn:nbn:se:kth:diva-103234 (URN)
Funder
VinnovaTrenOp, Transport Research Environment with Novel Perspectives
Note

QS 2012

Available from: 2012-10-07 Created: 2012-10-07 Last updated: 2012-10-10Bibliographically approved
3. How to decide on regional infrastructure to achieve intra-regional acceptability and inter-regional consensus?
Open this publication in new window or tab >>How to decide on regional infrastructure to achieve intra-regional acceptability and inter-regional consensus?
2012 (English)In: Papers in regional science (Print), ISSN 1056-8190, E-ISSN 1435-5957, Vol. 91, no 3, 617-643 p.Article in journal (Refereed) Published
Abstract [en]

Many regions face through-traffic that causes local negative externalities. Regions might respond by imposing user charges or investing in bypass transport infrastructure. In this paper two levels of decision-making are studied: co-operation among regions and acceptability within regions. If left to a single region, it will overcharge for usage and under-invest in bypass capacity. Through interregional co-operation, an efficient outcome can be reached. Without compensation within each region, intraregional acceptability constraints protecting certain interest groups can lead to inefficient tolling. This can explain political preferences for tolling bypasses and not city centre roads.

National Category
Transport Systems and Logistics
Identifiers
urn:nbn:se:kth:diva-71365 (URN)10.1111/j.1435-5957.2012.00445.x (DOI)000307932300007 ()2-s2.0-84865311108 (Scopus ID)
Funder
Formas
Note

TSC import 487 2012-01-30. QC 20121010

Available from: 2012-01-31 Created: 2012-01-31 Last updated: 2017-12-08Bibliographically approved
4. Achieving political acceptability for new transport infrastructure in congested urban regions
Open this publication in new window or tab >>Achieving political acceptability for new transport infrastructure in congested urban regions
Show others...
2012 (English)Report (Other academic)
Abstract [en]

The paper analyzes the political acceptability of policies targeted at relieving urban congestion. The paper combines a stylized model of an urban transport network with a somewhat more detailed model of the political process that incorporates interactions between voters, special interest groups and politicians to explore the possibilities to reach political acceptability for efficient transport policies. In a case study of a proposed bypass in Lyon, France, the paper compares a set of potential policies in terms of efficiency, equity and political acceptability. A possible explanation for the difficulty of achieving political support for efficient transport policies is that since urban road pricing policies are characterized by conflicting interest, the political decision making process must balance different interests against each other to reach an efficient outcome. The analysis suggest that the difficulty to achieve political support for efficient road pricing policies is not a lack of political acceptability; instead the difficulty arises because of low political feasibility for efficient transport pricing since non-efficient transport policies are seen as more attractive to the decision makers.

Publisher
27 p.
Series
CTS Working Papers in Transport Economics, 2012:19
Keyword
User charges, Political economy, Transport infrastructure, Welfare effects, Acceptability of transport pricing
National Category
Transport Systems and Logistics
Identifiers
urn:nbn:se:kth:diva-115957 (URN)
Note

TSC import 2076 2013-01-15 QC 20130612

Available from: 2013-01-15 Created: 2013-01-15 Last updated: 2016-08-15Bibliographically approved
5. Can high speed rail offset its embedded emissions?
Open this publication in new window or tab >>Can high speed rail offset its embedded emissions?
2012 (English)In: Transportation Research Part D: Transport and Environment, ISSN 1361-9209, E-ISSN 1879-2340, Vol. 17, no 1, 1-7 p.Article in journal (Refereed) Published
Abstract [en]

This paper analyzes the climate implications of investments in high speed railway lines given uncertainty in future transport demand, technology and power production. To capture the uncertainty of estimated parameters, distributions for the annual traffic emissions reduction required to compensate for the embedded emissions from the construction of infrastructure are calculated using Monte Carlo simulation. In order to balance the annualized emissions from the railway construction, traffic volumes of more than 10 million annual one-way trips are usually required. Most of the traffic diverted from other modes must come from aviation and the project cannot involve the extensive use of tunnels.

Keyword
High-speed rail, Embedded emissions, Infrastructure investment, Monte Carlo simulation
National Category
Transport Systems and Logistics Other Environmental Engineering
Identifiers
urn:nbn:se:kth:diva-63242 (URN)10.1016/j.trd.2011.09.006 (DOI)000297902100001 ()2-s2.0-80655144921 (Scopus ID)
Funder
TrenOp, Transport Research Environment with Novel Perspectives
Note
QC 20120127Available from: 2012-01-27 Created: 2012-01-23 Last updated: 2017-12-08Bibliographically approved

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