A differentiated tolls system - an effective transport policy tool for Slovenia?

Mateja Matajič, Timotej Jagrič and Jani Bekő

Applied Economics, 2015, vol. 47, issue 21, 2201-2217

Abstract: We provide an econometric model of passenger and freight transportation demand based on panel data for 10 sections of toll roads in Slovenia. Transportation demand on Slovenian motorways is price inelastic. The price elasticity of transportation demand statistically varies among different parts of the toll sections, so it would seem sensible to introduce a differentiated toll system that would allow the simultaneous achievement of multiple objectives, such as increasing the internalization of the external costs of transport, increasing transportation demand management on the basis of price and increasing cost recovery for the maintenance and development of toll roads in Slovenia. Transportation demand is even more responsive to changes in fuel price than changes in tolls, so transportation policy can manage transportation demand using differences in fuel prices. Based on estimates of demand models differentiated according to several geographical groups of road sections, we also find that growth in the price elasticity of transportation demand in Slovenia can be achieved through the expansion of the transport supply by increasing the competitiveness of rail transport and alternative transportation routes.

Date: 2015
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DOI: 10.1080/00036846.2015.1005818

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