The road damage externality is much more important than the urban congestion problem in less developed countries, in sharp contrast to the experience of the developed countries. There is no justification for petrol taxes to exceed the taxes imposed on diesel fuel.
This paper reports on the estimation of a cost function using pooled data for major US railroads for the period of 1974-86. Analysis is performed of short and long-run returns to scale, the extent of capital disequilibrium, and the adjustments to capital in the heavily regulated and quasi-regulated environments before and after the passage of the Staggers Act in 1980. It is found that there is considerable overcapitalisation in the rail industry and that this has persisted in spite of the Act.
Railway planners have chronically failed to recognise excess capacity. A longer view must be taken. The principles have long been understood; all that is needed is the will of governments and managers to apply them.
The network studies in the recent Serpell Report provide conclusive evidence that substantial savings would result from closure of lightly used railway lines. Political opposition to closures has been helped by deficiencies in railway costing and by excessive importance attached to contributory revenue.
The author concludes that optimal tolls on the San Francisco Bay Bridge would be much higher than those now charged, but that their introduction would have little effect on the composition of traffic.
A comment on views on the basis of road taxes expressed by several contributors to the January 1979 issue of this Journal.
What are the costs to others of an extra car in the traffic queue, and how can they be Brought home to the individual? The author argues that tolls and differential charges are essential to the efficient use and development of urban transport facilities. He discusses also the husbandry of equipment and allocation of land for transportation.
