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.
Topic: 13.5 Infrastructure
This paper analyses optimal pricing of rail infrastructure use, and optimality conditions for rail and road investment. It is demonstrated that under most circumstances rail charges should be below marginal costs and that investments in both modes should be reduced.
The authors re-examine the conclusions reached by Stephen Glaister in an article in this Journal in May 1976. They conclude that he overestimated the capacity that would have been required under uniform pricing, and also the price differentials required under peak-load pricing to reduce capacity and increase profit.
The author suggests that uncongested airports should charge a fixed fee per landing plus a charge per available seat mile.
Fitzgerald and Aneuryn-Evans on the Economics of Airport Development and Control. A Re-analysis of the Data
A comment on an article in the September 1973 issue of this Journal.
US public ports charge less than long-run marginal cost; they receive subsidies, especially in the form of capital grants or public bond issues. There is regional competition, and container traffic tends to be concentrated in certain ports, but total demand is inelastic. The authors consider that general price increases would lead to decreased subsidies and would be socially beneficial.
Infrastructure Pricing and the EEC Common transport Policy. The Case of Roads and Commercial Vehicles
The EEC proposals for harmonisation of commercial vehicle taxation would require all the proceeds to be spent on the roads, and no regard is paid to congestion and other elements of marginal social cost.
The author contends that large economies can be effected by peak load pricing for transport services. The Channel Tunnel project would have seemed much more attractive if provision has been made for differential charges to transfer some accompanied car traffic to even slightly less congested periods.