The impact of user heterogeneity on road franchising

Zhijia Tan and Hai Yang

Transportation Research Part E: Logistics and Transportation Review, 2012, vol. 48, issue 5, 958-975

Abstract: A model is presented for analyzing Pareto-efficient build-operate-transfer toll road contracts. The formulation simultaneously allows maximizing social welfare and private profit when road users vary in their value-of-time (VOT). The failure rate and mean residual functions of the VOT distribution are used to characterize Pareto-efficient solutions. Service quality, measured in terms of the volume-to-capacity ratio, is shown to be better than, identical to, or lower than the socially optimal level depending on the curvature of the mean residual VOT function. The outcomes of various regulatory regimes are examined as well.

Keywords: Road concessions; Pareto efficiency; User heterogeneity; Regulation (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (22)

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DOI: 10.1016/j.tre.2012.04.002

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