CPT874 - Principles of Transport Economics

SchoolCardiff School of Planning and Geography
Department CodeCPLAN0
Module CodeCPT874
External Subject CodeK460
Number of Credits20
LevelL7
Language of DeliveryEnglish
Module Leader Dr Georgina Santos
SemesterAutumn Semester
Academic Year2014/5

Outline Description of Module

The module provides the basis for the understanding of demand and supply in the transport sector, transport externalities and corrective instruments, investment and economic appraisal and transport management. It makes students aware of relevant microeconomic theory and solutions to transport problems.

On completion of the module a student should be able to

(1) conceptualise transport problems in economic terms; (2) apply economic theory to current transport problems such as for example traffic congestion and CO2 emissions; (3) critically evaluate transport policies and programs; and (4) understand the main issues related to transport management. 

Students will also improve a number of skills they hopefully already have, and: (a)be able to orally present group work on a specific topic; (b) be able to debate issues related to transport externalities, transport policies and transport projects appraisal; (c) be able to write a critical essay with a clear structure; (d) be able to answer specific questions on different transport economics topics under the pressure of an exam environment.

How the module will be delivered

The module consists of lectures, group and class discussions and group presentations. The group and class discussions promote skills in communication, as do the group presentations. Most topics throughout the module are illustrated with at least one example or case-study, which helps put the concepts together.

Skills that will be practised and developed

During the course of the module there will be plenty of opportunities to practise and master a number of skills. Students will be expected to:

1.    be able to work in a group towards a presentation

2.    debate a topic in class, justifying arguments in a reasoned way

3.    read the latest research on a topic new to the student and be able to grasp the main points, regardless of the student’s background.

How the module will be assessed

There will be 3 summative assessments supported by formative assessments.

The formative assessments will consist of one group presentation, to take place in a session before the summative group presentation takes place, and linked to learning outcome (3) and learning outcomes/skills (a) and (b), and class and group debates and discussions, to take place virtually every week, and linked to learning outcomes/skills (1) to (4) and (b). The group presentations will be followed by detailed group AND individual feedback, which will be part of the formative assessment of this module and will help students to improve their group work and presentation skills for other modules.

Most of these assignments can be undertaken by students with almost any disability. However, individual cases will be catered for if a student were unable to complete any of the assignments described above due to a disability.

Type of assessment

%Contribution

Title

Duration
(if applicable)

Approx. date of Assessment

Individual Essay

25

Individual essay (linked to learning outcome 5 and learning outcomes/skills c).

1,200 words

Autumn

Group presentation

25

Group presentation (oral, no written report) (linked to learning outcome 3 and learning outcomes/skills a) and b)

One session

Autumn

Written exam

50

Exam (linked to learning outcomes 1 to 3 and learning outcomes/skills d)

1.5 hours

January exam period

The potential for reassessment in this module

Students are permitted to be reassessed (usually once) in a module which they have failed, in line with course regulations. The reassessment will usually take place during the summer.

Assessment Breakdown

Type % Qualifying Mark Title Duration(hrs) Period Week
Written Assessment 25 N/A
Essay
N/A 1 N/A
Presentation 25 N/A
Group Presentation
N/A 1 N/A
Examination - Autumn Semester 50 N/A
Principles Of Transport Economics
1.5 1 N/A

Syllabus content

Appraisal of transport projects. Important concepts in (transport) economics. Demand, supply and elasticities. Externalities and policies to correct them. Parking policies and road pricing. Discrete choice models. Transport management.

Essential Reading and Resource List

Button, K. J. (2010), Transport Economics, 3rd edition, Cheltenham, UK - Northampton, MA - USA: Edward Elgar.

Button, K. (2004), ‘The Rationale for Road Pricing: Standard Theory and Latest Advances’, in Santos, G. (Ed.), Road Pricing: Theory and Evidence, Research in Transportation Economics, Vol. 9,Oxford: Elsevier, pp. 3-25. [This is available as en e-journal].

Department for Transport (2011), Transport Analysis Guidance: Cost Benefit Analysis (TAG Unit 3.5.4), April

http://www.dft.gov.uk/webtag/documents/expert/pdf/unit3.5.4.pdf

and

HM Treasury (2003), Green Book, Appraisal and Evaluation in Central Government, London. http://www.hm-treasury.gov.uk/d/green_book_complete.pdf

Look at:

-Definition of CBA in the Glossary

-Discounting in Chapter 5

-Valuing non-market impacts in Annex 2

-Distributional impacts in Annex 5 (don’t go in detail but try to get the general idea)

-Discount rate in Annex 6

DTLR multi-criteria analysis manual[Chapters 2, 3 and 4]

This is an Internet publication from the former Department for Transport, Local Government and the Regions, available at

http://www.nera.com/nera-files/Multi-criteria_Analysis_Model.pdf

Goodwin, P., Dargay, J. and Hanly, M. (2004), ‘Elasticities of Road Traffic and Fuel Consumption with respect to Price and Income: A Review’, Transport Reviews, 24(3), pp. 275-292.

Handy, C (1993), Understanding Organisations, London: Penguin, 4th edition. [Chapter 7]

Santos, G., Behrendt, H., Maconi, L., Shirvani, T. and A. Teytelboym (2010), ‘Externalities and economic policies in road transport’, Research in Transportation Economics, 28(1), pp. 2-45.

Small, K. and E. Verhoef (2007), Economics of Urban Transportation, London: Routledge. [Chapters 2 and 3 and 5.2]

Train, K. (2009), Discrete Choice Methods with Simulation, 2nd edition, Cambridge: Cambridge University Press. http://elsa.berkeley.edu/books/choice2.html [Chapters 2 and 3]

van der Gun, M. and R. Jeuring (2009), ‘Public Transport & Marketing in Small and Medium Sized Cities’, paper presented at the European Transport Conference.http://www.etcproceedings.org/paper/public-transport-and-marketing-in-small-and-medium-sized-cities

Varian, H. (1993), Intermediate Microeconomics, New York - London: W. W. Norton & Company.[Chapter 1]

Verhoef, E. T., Nijkamp, P. and P. Rietveld (1995), ‘The Economics of Regulatory Parking Policies: The (Im)possibilities of Parking Policies in Parking Regulation’, Transportation Research Part A: Policy and Practice, 29(2), pp. 141-156.

Background Reading and Resource List

Transport management theories and management

Cole, G. A. (2004), Management theory and practice, London: Thomson Learning, 6th edition. [Part I]

Hensher, D A, and A. M. Brewer (2001), Transport: an economics and management perspective, Oxford: Oxford University Press. [Sections 8.1 - 8.6]

Transport marketing

Cairns, S., Sloman, L., Newson, C., Anable, J., Kirkbride, A. and P. Goodwin (2004), Smarter choices: Changing the way we travel, Final report to the UK Department for Transport, London. [Chapter 6]

Available at:

http://discovery.ucl.ac.uk/1224/

and also at
http://webarchive.nationalarchives.gov.uk/+/http://www.dft.gov.uk/pgr/sustainable/smarterchoices/ctwwt/ter6publictransportinfor5768.pdf

Davies, J. and R. Clark (1996), Valley lines: the people’s railway: the inside story of a train business 1983-1993, Sheffield: Platform 5 Publishing.

International Association of Public Transport (2003), ‘How to build, strengthen or manage a brand in public transport?’, Briefing on public transport branding, January.

http://www.uitp.org/mos/corebrief/Branding-en.pdf

White, P (2009), Public Transport: Its Planning, Management and Operation, London: Routledge, 5th edition. [Chapter 3]

Appraisal of transport projects – first part

Blauwens, G., De Baere, P. and E. Van de Voorde (2002), Transport Economics, Antwerpen: Uitgeverij De Boeck nv. [Chapter 17)]

Pearce, D. (1998), ‘Cost-Benefit Analysis and Environmental Policy’, Oxford Review of Economic Policy, 14(4), pp. 84-100.

Appraisal of transport projects – second part

Pearce, D. and K. Turner (1990). Economics of natural resources and the environment, London: Harvester Wheatsheaf. [Chapter 14]

Pearce, D. (1998), ‘Cost-Benefit Analysis and Environmental Policy’, Oxford Review of Economic Policy, 14(4), pp. 84-100.

Readings on the value of time

Department for Transport (2009), Transport Analysis Guidance: Values of Time and Operating Costs,TAG Unit 3.5.6, April. http://www.dft.gov.uk/webtag/documents/expert/unit3.5.6.php

Hensher, D. and P. Goodwin (2004), ‘Using values of travel time savings for toll roads: avoiding some common errors’, Transport Policy, 11, pp. 171-82.

Mackie, P., Wardman, M., Fowkes, A., Whelan, G., Nellthorp, J. and J. Bates (2003a), Values of travel time savings in the UK - Summary Report, Report to the Department of Transport, Institute for Transport Studies, University of Leeds, Leeds. http://www.its.leeds.ac.uk/downloads/VOTSummary.pdf

Mackie, P., Wardman, M., Fowkes, A., Whelan, G., Nellthorp, J. and J. Bates (2003b), Values of travel time savings in the UK - Full Report, Report to the Department of Transport, Institute for Transport Studies, University of Leeds, Leeds.

http://www.its.leeds.ac.uk/downloads/VOTFull.pdf

Wardman, M. (1998), ‘The value of travel time – A review of British evidence’, Journal of Transport Economics and Policy, 32(3), pp. 285-316. [This paper is available electronically on https://learningcentral.cf.ac.uk]

Wardman, M. (2001), ‘A review of British evidence on time and service quality valuations’, Transportation Research Part E: Logistics and Transportation Review, 37(2-3), pp. 107-128.

Readings on the value of a statistical life

Alberini, A., Cropper, M., Krupnick, A. and N. Simon (2002), ‘Does the Value of a Statistical Life Vary with Age and Health Status? Evidence from the United States and Canada’, Discussion Paper 02-19, Resources for the Future, April. http://www.rff.org/rff/Documents/RFF-DP-02-19.pdf

Andersson, H. (2007), ‘Willingness to pay for road safety and estimates of the risk of death: Evidence from a Swedish contingent valuation study’, Accident Analysis and Prevention, 39(4), pp. 853-865.

Australian Government, Department of Finance and Regulation, Office of Best Practice (2008), ‘Best Practice Regulation Guidance Note: Value of statistical life’. www.finance.gov.au/obpr/docs/ValuingStatisticalLife.rtf

Bhattacharya, S., Alberini, A. and M. Cropper (2007), ‘The value of mortality risk reductions in Delhi, India’, Journal of Risk and Uncertainty, 34(1), pp. 21-47.

Bowland, B. J. and J. C. Beghin (2001), ‘Robust estimates of value of a statistical life for developing economies’, Journal of Policy Modelling, 23(4), pp. 385-396.   

De Blaeij, A., Florax, R., Rietveld, P. and E. T. Verhoef (2003), ‘The Value of a Statistical Life in Road Safety: a Meta-Analysis’, Accident Analysis and Prevention, 35(6), pp.973-986.

Dionne, G. and P. Lanoie (2004), ‘Public choice about the value of a statistical life for cost-benefit analyses – The case of road safety’, Journal of Transport Economics and Policy, 38(2), pp. 247-274.

Freeman, A. M. (2003), The Measurement of Environmental and Resource Values: Theory and Methods, 2nd edition, Resources for the Future: Washington D.C.

Hultkrantz, L., Lindberg, G. and C. Andersson (2006), ‘The value of improved road safety’, Journal of Risk and Uncertainty, 32(2), pp. 151-170.

Miller, T. (2000), ‘Variations between countries in value of statistical life’, Journal of Transport Economics and Policy, 34(2), pp. 169-188.

Basic concepts in (transport) economics. Demand, supply and elasticities

Button, K. J. (2010), Transport Economics, 3rd edition, Cheltenham, UK – Northampton, MA - USA: Edward Elgar.

OR

Button, K. J. (1993), Transport Economics, Aldershot: Edward Elgar.

Pearce, D. and K. Turner (1990), Economics of natural resources and the environment, London: Harvester Wheatsheaf.

Elasticities. Transport externalities. Introduction to transport policies from an economic perspective

Acutt, M. and J. Dodgson (1997), ‘Controlling the environmental impacts of transport: matching instruments to objectives’, Transportation Research Part D: Transport and Environment, 2(1), pp. 17-33.

Baumol, W. and W. Oates (1988), The Theory of Environmental Policy, Cambridge: Cambridge University Press, 2nd edition.

Blauwens, G., De Baere, P. and E. Van de Voorde (2002), Transport Economics, Antwerpen: Uitgeverij De Boeck nv. [Chapters 10 and 11]

Button, K. (1993), ‘Overview of Internalising the Social Costs of Transport’, in OECD/ECMT (1994), Internalising the Social Costs of Transport, OECD/ECMT, Paris. (Book produced on the basis of a seminar held in Paris in 1993). http://www.internationaltransportforum.org/IntOrg/ecmt/taxes/pdf/94socCosts2e.pdf

Button, K. J. (2010), Transport Economics, 3rd edition, Cheltenham, UK – Northampton, MA - USA: Edward Elgar.

OR

Button, K. J. (1993), Transport Economics, Aldershot: Edward Elgar.

Fischer, M.M. (2000), ‘Travel Demand’, in Polak, J. B. and A. Heertje (eds.), Analytical Transport Economics: A International Perspective, Cheltenham, UK – Northampton, MA.: Edward Elgar.

Goodwin, P. B. (1992), ‘A Review of New Demand Elasticities with Reference to Short and Long Run Effects to Price Changes’, Journal of Transport Economics and Policy, 26(2), pp. 155-169.

Readings on elasticities

De Jong, G. and H. Gunn (2001), ‘Recent Evidence on Car Cost and Time Elasticities of Travel Demand in Europe’, Journal of Transport Economics and Policy, 35(2), pp.137-160.

Espey, M. (1998), ‘Gasoline demand revisited: an international meta-analysis of elasticities’, Energy Economics, 20, pp.273-295.

Goodwin, P. B. (1992), ‘A Review of New Demand Elasticities with Reference to Short and Long Run Effects to Price Changes’, Journal of Transport Economics and Policy, 26(2), pp. 155-169. [This paper is available electronically on https://learningcentral.cf.ac.uk]

Goodwin, P., Dargay, J. and M. Hanly (2004), ‘Elasticities of Road Traffic and Fuel Consumption with respect to Price and Income: A Review’, Transport Reviews, 24(3), pp. 275-292.

Graham, D. and S. Glaister (2002) The demand for automobile fuel: a survey of elasticities, Journal of Transport Economics and Policy, 36, pp. 1-26.

Graham, D. and S. Glaister (2004), ‘Road Traffic Demand Elasticity Estimates: A Review’, Transport Reviews, 24(3), pp. 261–274.

Oum, T. H., Waters II, W. G. and J-S. Yong (1992), ‘Concepts of Price Elasticities of Transport Demand and Recent Empirical Estimates’, Journal of Transport Economics and Policy, 26(2), pp. 139-154. [This paper is available electronically on https://learningcentral.cf.ac.uk]

Transport policies from an economic perspective

Baumol, W. and W. Oates (1988), The Theory of Environmental Policy, Cambridge: University Press, 2nd edition.

Blauwens, G., De Baere, P. and E. Van de Voorde (2002), Transport Economics, Antwerpen: Uitgeverij De Boeck nv. [Chapters 14 and 15].

Button, K. J. (2010), Transport Economics, 3rd edition, Cheltenham, UK – Northampton, MA - USA: Edward Elgar.

OR

Button, K. J. (1993), Transport Economics, Aldershot: Edward Elgar.

Davis, L. (2008), ‘The Effect of Driving Restrictions on Air Quality in Mexico City’, Journal of Political Economy, 116(1), pp. 38-81.

Eskeland, G. and T. Feyzioglu (1997), ‘Rationing Can Backfire: The ‘Day without a Car’ in Mexico City’, World Bank Economic Review, 11(3), pp. 383-408.

Newbery, D.M. (1990), ‘Pricing and Congestion: Economic Principles Relevant to Pricing Roads’, Oxford Review of Economic Policy, 6(2), pp. 22-38.

Parry, I., Walls, M. and H. Harrington (2007), ‘Automobile externalities and policies’, Journal of Economic Literature, 45(2), pp. 373-399.

Verhoef, E. (1994), ‘External Effects and Social Costs of Road Transport’, Transportation Research Part A: Policy and Practice, 28(4), pp. 273-287.

Transport investment, induced demand and agglomeration economies

Bonsall, P. (1996), ‘Can induced traffic be measured by surveys?’, Transportation, 23(1), pp. 17-34.

Coombe, D. (1996), ‘Induced Traffic: What Do Transportation Models Tell Us?’, Transportation, 23(1), pp. 83-101.

Goodwin, P. B.(1996), ‘Empirical Evidence on Induced Traffic’, Transportation, 23(1), pp. 35-54.

Graham, D. (2007),‘Agglomeration, Productivity and Transport Investment’, Journal of Transport Economics and Policy, 41(3), pp. 317-343.

Hills, J. P. (1996), ‘What is induced traffic?’, Transportation, 23(1), pp. 5-l6.

Mackie, P. (1996), ‘Induced traffic and economic appraisal’, Transportation, 23(1), pp.103- 119.

Noland, R.B., (2001), ‘Relationships between highway capacity and induced vehicle t

ravel’, Transportation Research Part A: Policy and Practice, 35, pp. 47-72.

Shefer, D. and H. Aviram (2005), ‘Incorporating agglomeration economies in transport cost-benefit analysis: The case of the proposed light-rail transit in the Tel-Aviv metropolitan area’,

Papers in Regional Science, 84(3), pp. 487-508.

Discrete choice models

Ben-Akiva, M. and S. Lerman (1985), Discrete choice analysis: theory and application to travel demand, Cambridge, Mass.; London: MIT Press.

Gujarati, D. and D. Porter (2009), Basic Econometrics, Boston: McGraw-Hill, 5th edition.

Hensher, D. A. and A. M. Brewer (2001), Transport: An Economics and Management Perspective, Oxford: Oxford University Press. [Chapter 4.4.2]

Small, K. and E. Verhoef (2007), Economics of Urban Transportation, London: Routledge. [Chapter 2]

Road pricing group presentations (formative assessment)

Börjesson, M., Eliasson, J., Hugosson, M. B. and K. Brundell-Freij (2012), ‘The Stockholm congestion charges—5 years on. Effects, acceptability and lessons learnt’, Transport Policy, 20(SI), pp.1-12.

Button, K. (2004), ‘The Rationale for Road Pricing: Standard Theory and Latest Advances’, in Santos, G. (Ed.), Road Pricing: Theory and Evidence, Research in Transportation Economics, Vol. 9,Oxford: Elsevier, pp. 3-25. [This is available as en e-journal].

Chin, A. T. H. (2002), Road pricing: Singapore’s experience, Essay prepared for the IMPRINT-EUROPE Thematic Network: ‘Implementing Reform on Transport Pricing: Constraints and Solutions: Learning from Best Practice’ 3rd Seminar. www.imprint-eu.org/public/Papers/IMPRINT3_chin.pdf

De Palma, A., Lindsey, R. and E. Niskanen (2006), ‘Policy Insights from the Urban Road Pricing Case Studies’, Transport Policy, 13(2), pp. 149-161.

Eliasson, J. (2009), ‘A cost-benefit analysis of the Stockholm congestion charging system’, Transportation ResearchPart A: Policy and Practice, 43(4), pp. 468-480.

Eliasson, J. and L. Jonsson (2011), ‘The unexpected “yes”: Explanatory factors behind the positive attitudes to congestion charges in Stockholm’, Transport Policy, 18(4), pp. 636-647.

Eliasson, J. and L. Mattsson (2006), ‘Equity effects of congestion pricing - Quantitative methodology and a case study for Stockholm’, Transportation Research Part A: Policy and Practice, 40(7), pp. 602-620.

Emmerink, R.H.M., Nijkamp, P. and P. Rietveld (1995), ‘Is congestion pricing a first-best strategy in transport policy? A critical review of arguments’, Environment and Planning B, Planning and Design, 22(5), pp. 581-602.

Gaunt, M.; Rye, T. and S. Allen (2007), ‘Public Acceptability of Road User Charging: The Case of Edinburgh and the 2005 Referendum’, Transport Reviews, 27(1), pp.85-102.

Goh, M. (2002), ‘Congestion Management and Electronic Road Pricing in Singapore’, Journal of Transport Geography,10(1), pp. 29-38.

Kottenhoff, K. and K. Brundell Freij (2009), ‘The Role of Public Transport for Feasibility and Acceptability of Congestion Charging - The Case of Stockholm’, Transportation ResearchPart A: Policy and Practice, 43(3), pp. 297-305.

Goodwin, P. B. (1989), ‘The Rule of Three: A Possible Solution to the Political Problem of Competing Objectives for Road Pricing’, Traffic Engineering and Control, 30(10), October, pp. 495-497.

Goodwin, P. B. (1990), ‘How to Make Road Pricing Popular’, Economic Affairs, 10, June-July, pp. 6-7.

Jaensinisak, S., Wardman, M. and A. May (2005), ‘Explaining Variations in Public Acceptability of Road Pricing Schemes’, Journal of Transport Economics and Policy, 39(2), pp. 127-153.

Jones, P. (1998), ‘Urban Road Pricing: Public Acceptability and Barriers to Implementation’, in Button, K. and E. Verhoef (Eds.), Pricing, Traffic Congestion and the Environment, Lincolnshire: Edward Elgar.

Nevin, M. and L. Abbie (1993), ‘What Price Roads? Practical Issues in the Introduction of Road User Charges in Historic Cities in the UK’, Transport Policy, 1(1), pp. 68-73.

Ramjerdi, F., Minken, H. and K. Østmoe (2004), ‘Norwegian urban tolls’, in Santos, G. (Ed.), Road Pricing: Theory and Evidence, Research in Transportation Economics, Vol. 9,Oxford: Elsevier, pp. 237-249. [This is available as en e-journal].

Ryley, T. and N. Gjersoe (2006), ‘Newspaper Response to the Edinburgh Congestion Charging Proposals’, Transport Policy, 13(1), pp.66-73.

Santos, G. and L. Rojey (2004), ‘Distributional Impacts of Road Pricing: The Truth Behind the Myth’, Transportation, 31(1), pp. 21-42.

Schuitema, G. and L. Steg (2008), ‘The Role of Revenue Use in the Acceptability of Transport Pricing Policies’, Transportation Research Part F: Traffic Psychology and Behaviour, 11(3), pp. 221-231.

Schweitzer, L. and B. Taylor (2008), ‘Just pricing: the distributional effects of congestion pricing and sales taxes’, Transportation, 35 (6): 797-812.

Small, K. A. (1992), ‘Using the Revenues from Congestion Pricing’, Transportation, 19(4), pp. 359-381.

Small, K.A. and E.T. Verhoef (2007), The Economics of Urban Transportation, Routledge, London [Chapter 4].

Phang, S. Y. and R. S. Toh (1997), ‘From Manual to Electronic Road Congestion Pricing: The Singapore Experience and Experiment, Transportation Research Part E: Logistics and Transportation Review, 33(2), pp. 97-106.

Santos, G. (2005), ‘Urban Congestion Charging: A Comparison between London and Singapore’, Transport Reviews, 25 (5): 511-534.

Santos, G. (2008), ‘The London Congestion Charging Scheme’, Brookings Wharton Papers on Urban Affairs 2008, pp. 177-234.
http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=42633376&site=ehost-live

Santos, G. and J. Bhakar (2006), ‘The Impact of the London Congestion Charging Scheme on the Generalised Cost of Car Commuters to the City of London’, Transport Policy, 13(1), pp. 22-33.

Santos, G., Li, W. and W. Koh (2004), ‘Transport Policies in Singapore’, in Santos, G. (Ed.), Road Pricing: Theory and Evidence, Research in Transportation Economics, Vol. 9,Oxford: Elsevier, pp. 209-235. [This is available as en e-journal].

Small, K.A. and E.T. Verhoef (2007), The Economics of Urban Transportation Routledge, London [Chapter 4].

Willoughby, C. (2000), Singapore’s Experience in Managing Motorization and its Relevance to other Countries, Discussion Paper TWU-43, TWU Series, The World Bank April. http://irispublic.worldbank.org/85257559006C22E9/All+Documents/85257559006C22E9852570410065DD1E/$File/Singapore1s0Experience.pdf

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