The tax treatment of company cars, commuting and optimal congestion taxes

In Europe, the preferential tax treatment of company cars implies that many employees receive a company car as part of their compensation package. In this paper, we consider a model in which wages and the decision whether or not to provide a company car are the result of direct negotiation between employer and employee. Using this framework, we theoretically and numerically study first- and second-best optimal tax policies on labour and transport markets, focusing on the role of the tax treatment of company cars. We obtain the following results. First, higher labour taxes and a more favourable tax treatment of company cars raise the fraction employees that receives a company car; congestion and congestion tolls reduce it. Second, in countries that provide large implicit subsidies to company cars, eliminating the preferential tax treatment of company cars may be an imperfect but quite effective substitute for currently unavailable congestion tolls. The numerical illustration, calibrated using Belgian data, suggests that it yields about half the welfare gain attainable through optimal congestion taxes. Third, the favourable tax treatment of company cars justifies large public transport subsidies; the numerical results are consistent with zero public transport fares. Finally, we find that earlier models that ignored the preferential tax treatment of company cars may have substantially underestimated optimal congestion tolls in Europe. The numerical illustration suggests that about one third of the optimal congestion toll we obtain can be attributed to the current tax treatment of company cars.     

The symbolism of ‘eco cars’ across national cultures: Potential implications for policy formulation and transfer

Transport choices are not merely practical decisions but steeped in cultural and societal perceptions. Understanding these latent drivers of behaviour will allow countries to develop and import policies to more successfully promote sustainable transport. Transport symbolism – what people believe their ownership or use of a mode connotes to others about their societal position – has been shown to be one such, non-trivial, hidden motivator. In the case of hybrid and electric cars (‘eco cars’), studies have demonstrated how their symbolic value varies within a society among different social groups. As yet, however, there has been scant research into comparing how the symbolism of a mode varies across national cultures, horizontally, between individuals with similar socio-demographic characteristics. Through qualitative thematic analysis, this study utilises two of Hofstede’s cross-cultural indices – power differential and individualism versus collectivism – to develop and strengthen theory on how the differing symbolism of eco cars currently varies between four cultural clusters – Anglo, Nordic, Confucian and South Asian. It also deliberates how observed symbolic qualitative differences may influence an individual or group choice to procure eco cars. Finally, it discusses how policy development, transfer and marketing, within the context of eco cars, may need to be modified by national governments, in the Confucian and South Asian cultures, so as to encourage uptake and modal shift.     

A Stated preference freight mode choice model

Transport policy aims to assist the transport system to work more efficiently and effectively. An understanding of the reasons why people choose to move freight in a certain manner is critical to the development of appropriate policies. This article outlines a data collection approach and the development of a disaggregate mode choice model applicable to the analysis of freight shipper decision making. It focuses on the choice between rail and road in Java, Indonesia. The model indicates that safety, reliability and responsiveness are major attributes influencing rail/road freight mode choice. Transport policies aimed at improving these dimensions should increase the attractiveness of rail transport.     

Implications of globalization for co 2 emissions from transport

Transport accounts for about 25% of global CO 2 emissions. Transport activities are on the rise in the coming decades. Would associated CO 2 emissions move upwards as well, and at what rate? The present paper explores the future of these CO 2 emissions, starting from four scenarios for global transport. Considering fuel consumption, energy efficiencies in transport, occupancy rates of transport means, size of cars on the market, and possible environmental policies we find CO 2 emissions are persistently increasing, especially in the less wealthy areas of the world. In Europe, policies that attempt to control mobility and also limit CO 2 emissions may succeed in reducing emissions growth by about 30%. Efforts to increase energy efficiency of transport, in particular road transport, would contribute most to such reduction.     

Personal travel management: the adoption and consideration of travel‐related strategies

Traveler behavior plays a role in the effectiveness of travel demand management (TDM) policies. Personal travel management is explored in this paper by analyzing individuals' adoption and consideration of 17 travel‐related alternatives in relation to socio‐demographic, mobility, travel‐related attitude, personality and lifestyle preference variables. The sample comprises 1282 commuters living in urban and suburban neighborhoods of the San Francisco Bay Area. Among the findings: females were more likely to have adopted/considered the more ‘costly’ strategies; those with higher mobility were more likely to have adopted/considered travel‐maintaining as well as travel‐reducing strategies; and those who like travel and want to do more are less likely to consider travel‐reducing strategies. These findings, when combined with those of earlier work on this subject, present a compelling argument for the need to further understand traveler behavior – particularly in response to congestion and TDM policies.     

Sub‐optimal decision‐making and the transportation problem

A modification to the transportation problem is outlined that aims to improve the quality of predictions of trip matrices, and at the same time, allow some behavioural and economic insights. A framework is suggested within which this modification may be made and a suitable statistic and iterative process are described. A simple example demonstrates the validity of the modification and suggests some areas of difficulty with the approach.     

Should subsidies to urban passenger transport be increased? A spatial CGE analysis for a German metropolitan area

In many countries passenger transport is significantly subsidized in a variety of ways for various reasons. The objective of this paper is to examine efficiency, distributional, environmental (CO₂ emissions) and spatial effects of increasing different kinds of passenger transport subsidies discriminating between household types, travel purposes and travel modes. The effects are calculated by applying a numerical spatial general equilibrium approach calibrated to an average German metropolitan area. In extension to most studies focusing on only one kind of subsidy, we compare the effects of different transport subsidies within the same unified framework that allows to account for two features not yet considered simultaneously in studies on transport subsidies: endogenous labor supply and location decisions. Furthermore, congestion, travel mode choice, travel related CO₂ emissions and institutional details regarding the tax system in Germany are taken into account. The results suggest that optimal subsidy levels are either small or even zero. While subsidizing public transport is welfare enhancing, subsidies to urban road traffic reduce aggregate urban welfare. Concerning the latter it is shown that making investments in urban road infrastructure capacity or reducing gasoline taxes may even be harmful to residents using predominantly automobile. In contrast, pure commuting subsidies hardly affect aggregate urban welfare, but distributional effects are substantial. All policies cause suburbanization of city residents and (except for subsidizing public transport) contribute to urban sprawl by raising the spatial imbalance of residences and jobs but the effect is relatively small. In addition, the policies induce a very differentiated pattern regarding distributional effects, benefits of landowners and environmental effects.     

On a pathway to de-carbonization – A comparison of new passenger car CO2 emission standards and taxation measures in the G20 countries

Considering the role of transport for a 1.5 Degree stabilization pathway and the importance of light-duty vehicle fuel efficiency within that, it is important to understand the key elements of a policy package to shape the energy efficiency of the vehicle fleet. This paper presents an analysis focusing on three types of policy measures: (1) CO₂ emission standards for new vehicles, (2) vehicle taxation directly and indirectly based on CO₂ emission levels, and (3) fuel taxation. The paper compares the policies in the G20 economies and estimates the financial impact of those policies using the example of a Ford Focus vehicle model. This analysis is a contribution to the assessment of the role of the transport sector in global decarbonisation efforts. The findings of this paper show that only an integrated approach of regulatory and fiscal policy measures can yield substantial efficiency gains in the vehicle fleet and can curb vehicle kilometres travelled by individual motorised transport. Using the illustrative example of one vehicle model, the case study analysis shows that isolated measures, e.g. fuel efficiency regulation without corresponding fuel and vehicle taxes only have minor CO₂ emission reduction effects and that policy measures need to be combined in order to achieve substantial emission reduction gains over time. The analysis shows that the highest level of impact is achieved by a combination regulatory and fiscal policies rather than only one policy even if this policy is more aggressive. When estimating the quantitative effect of fuel efficiency standards, vehicle and fuel tax, the analysis shows that substantial gains with regard to CO₂ emission are only achieved at a financial impact level above 500 Euros over a four year period.     

The origin of California’s zero emission vehicle mandate

The California Zero Emission Vehicle (ZEV) rule, adopted in 1990, is arguably one of the most daring and controversial air quality policies ever adopted. Some consider it a policy failure, while others credit it with launching a revolution in clean automotive technology. This paper is the first systematic empirical study of the policy process that resulted in the adoption of the ZEV mandate. We draw upon theoretical frameworks of the policy process, empirical data from public documents, and personal interviews with key stakeholders, to explain how a confluence of technology, policy, and political circumstances created a window of opportunity that led to the adoption of this policy. We expect the conclusions of our analysis to be useful to other policy debates that involve technological innovation.     

The applicability of non-cooperative game theory in transport analysis

Various models that incorporate concepts from Non-Cooperative Game Theory (NCGT) are described in the transport literature. Game Theory provides powerful tools for analysing transport systems, but these tools have some drawbacks that should be recognised. In the current paper we review games that describe transport problems and discuss them within a uniform context. Although the paper does not introduce new tools, it presents insights concerning the relations between transport models and games. We divide existing games into groups and show that some common features characterise multiple games. We distinguish between games that make a conceptual contribution and games that are suitable for application. Compact or symmetric game structures make remarkable observations but often do not support actual decision-making. Less aesthetic formats, most of which are Stackelberg games between authorities and travellers, are stronger as instruments that assist in determining real-life policies; these formulations can be treated by practitioners as mathematical programs with equilibrium constraints and not as games. Yaron Hollander is currently conducting economic research of bus reliability at the Institute for Transport Studies at the University of Leeds. He previously worked for the Technion—Israel Institute of Technology; for the Israel Institute for Transportation Planning and Research; and for the public transport department at Ayalon Highways Co. Joseph N. Prashker is a professor at the Faculty of Civil and Environmental Engineering at the Technion—Israel Institute of Technology. Till recently he served as head of the Transportation Research Institute at the Technion. His interests are behavioural demand models, network analysis, and Game Theory applications in transportation.     

Why are work travel plans effective? Comparing conclusions from narrative and meta-analytical research synthesis

Reliable research synthesis is of high significance for a transport policy which tries to base its decisions on available empirical evidence. There is growing doubt whether the frequently used narrative approach provides a scientifically defensible way of synthesising a body of quantitative research results. The present paper demonstrates meta-analysis as a more objective and powerful alternative for this task. For this purpose evaluation data synthesised in two earlier narrative reviews on the effectiveness of work travel plans [Cairns et al. Making travel plans work: research report (former), Department for Transport, Local Government and the Regions (DTLR), London, 2002; Smarter choices—changing the way we travel. (Final report of the research project: The influence of soft factor interventions on travel demand. Research report for the Department for Transport.) London. Retrieved 1 December 2005, from , 2004] are meta-analytically re-analysed and compared with the conclusions drawn from the narrative synthesis of these data. Our meta-analyis provides only limited support for the conclusion that addressing parking is the hallmark of successful work travel plans. Our meta-analysis indicates that site and organisational factors as well as characteristics of the monitoring process are significant predictors of effective work travel plans, whereas Cairns et al. view little evidence for the impact of these factors.     

Speed limit laws in America: The role of geography, mobility and ideology

Speed limits had been centralized at the federal level since 1974, until decisions were devolved to the states in 1995. However, the centralization debate has reemerged in recent years. This paper conducts the first econometric analysis of the determinants of speed limit laws and State reactions after the repeal. By using mobility, geographic and political variables, our results suggest that geography - which reflects private mobility needs and social preferences -, is one of the main factors influencing speed limit laws, together with political ideology. Furthermore, we identify the presence of regional and time diffusion effects. By presenting first evidence on policy determinants, we provide a better understanding of the formulation of the heterogeneity of speed limits in US and offer implications for the debate on centralization and decentralization of transport policy.     

Examining the Political and Practical Reality of Bus-based Real Time Passenger Information

Abstract

Enhancing the bus experience through improved information provision is a key element of UK Government transport policy. Real time passenger information (RTPI) is perceived to reassure waiting passengers, to benefit the bus operator through increased revenue and the local authority, by promoting social inclusion and achieving a modal shift. RTPI also provides an important tool for operators by allowing them to monitor services and refine their schedules.

The aim of this paper is to understand the reasons for implementing RTPI in the bus sector, and to determine the key issues impacting on the likely success of such a policy. A case study approach investigates the experiences of two provincial towns in the UK. The paper suggests that, whilst it is unclear whether RTPI has resulted in an increase in bus patronage, it is considered to be most effective when combined as part of a package of measures. It is intended that the findings from the two case studies will reveal lessons of relevance to authorities contemplating the introduction of RTPI.