Private Provision of Highways: Economic Issues

Abstract

This paper reviews issues raised by the use of private firms to finance, build, and/or operate highways—issues including cost of capital, level and structure of tolls, and adaptability to unforeseen changes. The public sector’s apparent advantage in cost of capital is at least partly illusory due to differences in tax liability and constraints on the supply of public capital. The evidence for lower costs of construction or operation by private firms is slim. Private firms are likely to promote more efficient pricing. Effective private road provision depends on well‐structured franchise agreements that allow pricing flexibility, restrain market power, enforce a sound debt structure, promote transparency, and foster other social goals.     

Fuel price changes and their impacts on urban transport – a literature review using bibliometric and content analysis techniques, 1972–2017

ABSTRACT

While the period of heightened oil prices in 2005–2014 has attracted considerable academic and policy attention, there is scant cross-disciplinary research considering energy price, transport and land use together. In car dependent societies many socio-economically disadvantaged areas often lack public and active transport accessibility. Emerging research focus has been placed on issues of transport equity including effects of fuel prices. We reviewed 45 years (1972–2017) of publications about fuel price impacts, transport, and urban context, drawn from Web of Science listed publications. Bibliographic citation analysis reveals eight major research clusters with a set of inter-city comparative studies at their centre. The historical evolution, geographical trends, research approaches and the key themes are revealed by context analysis. The paper highlights the need for further studies looking at energy, transport and land use interaction, and suggests a greater focus on transport equity.     

Assuring finite moments for willingness to pay in random coefficient models

Random coefficient models such as mixed logit are increasingly being used to allow for random heterogeneity in willingness to pay (WTP) measures. In the most commonly used specifications, the distribution of WTP for an attribute is derived from the distribution of the ratio of individual coefficients. Since the cost coefficient enters the denominator, its distribution plays a major role in the distribution of WTP. Depending on the choice of distribution for the cost coefficient, and its implied range, the distribution of WTP may or may not have finite moments. In this paper, we identify a criterion to determine whether, with a given distribution for the cost coefficient, the distribution of WTP has finite moments. Using this criterion, we show that some popular distributions used for the cost coefficient in random coefficient models, including normal, truncated normal, uniform and triangular, imply infinite moments for the distribution of WTP, even if truncated or bounded at zero. We also point out that relying on simulation approaches to obtain moments of WTP from the estimated distribution of the cost and attribute coefficients can mask the issue by giving finite moments when the true ones are infinite.     

Tradeoffs among free-flow speed, capacity, cost, and environmental footprint in highway design

This paper investigates differentiated design standards as a source of capacity additions that are more affordable and have smaller aesthetic and environmental impacts than modern expressways. We consider several tradeoffs, including narrow versus wide lanes and shoulders on an expressway of a given total width, and high-speed expressway versus lower-speed arterial. We quantify the situations in which off-peak traffic is sufficiently great to make it worthwhile to spend more on construction, or to give up some capacity, in order to provide very high off-peak speeds even if peak speeds are limited by congestion. We also consider the implications of differing accident rates. The results support expanding the range of highway designs that are considered when adding capacity to ameliorate urban road congestion.     

Conference-shipper loyalty contacts: Time for a re-think?

This paper examines the purposal by the British Shipper's Council (BSC) and the UK government to place a statutory limit, by means of a regulations implementing the EEC rules for competition, upon the proportion of a shipper's cudstom that may be demanded in a loyalty agreement with a liner conference.

The development of 70% loyalty is traced through the following the various drafts of the EEC competition rules for sea transport; the department of trade investigation which found freight rate disparities that were caused partially by the less competitive environment in the UK than on the Continent; and evidence given on 70% loyalty beforew the house of Lords Select Commitee on the European Communities.

By considering the precise proposals, as suggested by the BSC, and means of enforcing them, 70% loyalty is found to be eminently practicable. the short-term consequences of its introduction are unlikely to be great, considering the shippers' needs for a good quality service; but in time the additional competition fostered by a less-than-100% tie would cause radical changes; conferences would have to aopt limit-pricing and respond to competition loyalty ties might be restricted to service contracts with large shippers. These effects would be felt far more in the UK since the continental environment is in any case more competitive.

It is concluded that 70% loyalty should be imposed upon conferences by means of the EEC Regulations in order to enhance the competitive environment of linear shipping.     

Perceptions of new electronic media for business communication

A model of communications media choice in business organizations is formulated based upon the results of exploratory interviews and the consumer choice literature. Choice is modelled as a function of organizational characteristics, individual characteristics, communication activity characteristics, communication initiator-recipient relationships and perceptions and feelings about available media. Hypotheses concerning media perceptions are developed from the exploratory interviews and tested using survey results from two firms in the Chicago region. The methodology developed in this research provides a useful approach to exploring preferences for and choices of communication media. As a paradigm for future research, it can be used to extend our understanding of communications media usage.     

Modelling and Control of an Automated Vehicle

We present a vehicle model that includes the vehicle dynamics and a vehicle tire model. The model developed is then used for conducting steering analysis of an automated vehicle. We test the developed model on a step lane change maneuver and propose a model-reference based controller for remote control of a vehicle. Stability analysis of the closed-loop system using die Lyapunov approach is included.     

Shipping economics: where we are and looking ahead from an institutional economics perspective [1]

There have been significant changes in the nature of shipping services in recent years. These have been most notably in the liner segment, but other parts of the market have not remained static. Technology shifts have been responsible for some of the change, but there have also been developments in institutional structures and managerial approaches. The economic drivers behind the sector, however, remain relatively poorly understood, despite a copious literature on shipping. Managerial economics has tended to put emphasis on the emergence of more sophisticated logistics structures and the role of information to tighten the overall supply chain. Industrial economists have been concerned with technical change and in particular with its interaction with more liberal markets structures. Often tied with this has been interest in the underlying nature of shipping markets (e.g. competitive, monopolistic or contestable) and, depending on the outcome, whether there is price leadership, collusion, predatory behaviour or whatever. Much of this work has been aspatial, treating shipping as any other industry with distance between demand and supply ignored or incorporated in a very simplistic manner. Environmental economists have focused on matters of fuel efficiency and pollution. This paper takes a broad overview of shipping economics in the context of the larger institutional framework within which it operates. It seeks broader analysis within an institutional economics framework, but also highlights some of the problems of achieving this.     

A capacity related reliability for transportation networks

A capacity related reliability for transportation networks with random link capacity is introduced. It is defined as the probability that the road network can accommodate a certain level of traffic demand, and is built on the concept of network reserve capacity. Network reserve capacity is defined as the largest multiplier applied to an existing origin-destination demand matrix that can be allocated to a transportation network in a user-optimal way without violating the link capacities. Due to large variability associated with link capacities, a probabilistic approach is adopted to model the different physical and operational factors that often degrade the capacity of roadways. A Monte Carlo simulation procedure is developed to estimate the capacity related reliability measure. Numerical results are provided to demonstrate the feasibility of the approach.