Economics at your fingertips  

Joint provision of transportation infrastructure

Se-il Mun

Economics of Transportation, 2019, vol. 19, issue C, -

Abstract: This paper considers the following scheme for the joint provision of transportation infrastructure: two regions jointly establish an operator for the infrastructure who is then responsible for collecting the user charges. The two regions make financial contributions to cover the costs of the infrastructure investment, and the revenue from user charges is distributed according to the share of contribution. The governments of the two regions choose the contribution that maximizes their regional welfare. Assuming that the infrastructure use is non-rival, we show that financing the infrastructure with revenue from user charges is better than financing it with tax revenue. We extend the analysis by incorporating congestion in infrastructure use. We show that independent decisions on contributions by two governments attain the first-best optimum when the operator sets the user charge such that the toll revenue just covers the cost of the investment. We further examine the conditions under which two governments participate in joint provision at Nash equilibrium.

Keywords: Transportation infrastructure; Joint provision; Congestion; Self-financing (search for similar items in EconPapers)
JEL-codes: H54 H77 L91 R41 R48 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.ecotra.2019.06.001

Access Statistics for this article

Economics of Transportation is currently edited by Mogens Fosgerau and Erik Verhoef

More articles in Economics of Transportation from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2021-08-20
Handle: RePEc:eee:ecotra:v:19:y:2019:i:c:4