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How large is the gap between present and efficient transport prices in Europe?

Stef Proost, Kurt Van Dender, C. Courcelle, Bruno De Borger, John Peirson (), D. Sharp, Roger Vickerman (), E. Gibbons, M. O'Mahony, Q. Heaney, Jeroen van den Bergh and Erik Verhoef ()
Additional contact information
Kurt Van Dender: K.U.Leuven, C.E.S., Energy, Transport and Environment
C. Courcelle: U.F.S.I.A., S.E.S.O.
D. Sharp: Canterbury, CERTE
E. Gibbons: Trinity College Dublin
M. O'Mahony: Trinity College Dublin
Q. Heaney: Trinity College Dublin

Energy, Transport and Environment Working Papers Series from KU Leuven, Department of Economics - Research Group Energy, Transport and Environment

Abstract: In this paper we analyse the gap between present transport prices and efficient transport prices. Efficient transport prices are those prices that maximise economic welfare, including external costs (congestion, air pollution, accidents). The methodology is applied to six urban and interregional case studies using one common optimal pricing model. The case studies cover passenger as well as freight transport and cover all modes. We find that prices need to be raised most for peak urban passenger car transport and to a lesser extent for interregional road transport. Optimal pricing results for public transport are more mixed. We show that current external costs on congested roads are a bad guide for optimal taxes and tolls: the optimal toll that takes into account the reaction of demand is often less than one third of the present marginal external cost.

Keywords: transport pricing; external costs; social costs; congestion pricing (search for similar items in EconPapers)
JEL-codes: H21 H23 R41 R48 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-ent, nep-net and nep-pbe
Date: 2001-09
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Journal Article: How large is the gap between present and efficient transport prices in Europe? (2002) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ete:etewps:ete0120

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