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on Transport Economics |
| By: | Valter Di Giacinto (Bank of Italy); Giacinto Micucci (Bank of Italy); Pasqualino Montanaro (Bank of Italy JEL classification: C32, E61, H54, R42, R53) |
| Abstract: | This paper contributes to the empirical literature on the magnitude of the network effects of public infrastructures, introducing a novel approach. After estimating the dynamics common to time series for the regional public capital stock, coordinated policy shocks are identified within a properly specified structural VEC model. The findings confirm previous evidence that transport infrastructures exert positive macroeconomic effects in the long run. At the same time, it is shown that this effect is attributable mostly to the impact of coordinated public policy shocks, as the literature on network externalities predicts. |
| Keywords: | public capital, transport infrastructure, public policy coordination, network externalities, VEC model. |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_869_12&r=tre |
| By: | Bruno DE BORGER; Stefan PROOST |
| Abstract: | This paper considers various policy measures to reduce traffic externalities in cities, including externality-reducing investments, tolls, emission standards, low emission zones, and bypass capacity to guide traffic around the city center. Using a simple model that distinguishes local and through traffic, we study the optimal use of these instruments by an urban government that cares for the welfare of its inhabitants, and we compare the results with those preferred by a federal authority that takes into account the welfare of all road users. Our results include the following. First, compared to the federal social optimum, we show that the city government will over-invest in externality-reducing infrastructure whenever this infrastructure increases the generalized cost of transit traffic. Second, comparing emission standards and road tolls, we find that cities with a lot of commuters will favor tolls, even though from the federal perspective standards are better. Third, when implementing low emission zones, the urban government will set both the fee for non-compliance and the standard at a higher level than the federal government. Moreover, at sufficiently high transit levels the urban government will prefer imposing a toll instead of implementing a low emission zone. Fourth, if the city can toll the urban infrastructure, it will only invest in bypass capacity when it is allowed to earn extra toll revenues on the bypass that exceed investment costs. Although the paper focuses on non-congestion externalities, most insights also hold in the presence of congestion. |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:ces12.10&r=tre |
| By: | Ricardo Guerrero-Lemus (Departamento de Física Básica, Av. Astrofísico Francisco Sánchez s/n, Universidad de La Laguna, 38206 S/C de Tenerife, SPAIN.); Gustavo A. Marrero (Departamento de Análisis Económico, Campus de Guajara, Universidad de La Laguna, 38071 S/C de Tenerife, SPAIN.); Luis A. Puch (Departamento de Economía Cuantitativa, Universidad Complutense de Madrid, Campus de Somosaguas, 28223 Madrid, SPAIN.) |
| Abstract: | In this paper we analyze the role of changes in the fuel mix on emissions reduction and the diversification of risks associated to rising prices of energy. To this purpose we evaluate the average cost and the cost volatility of alternative fuel combinations in the road transport sector by means of the Mean-Variance Portfolio Theory. The results suggest big gains in diversification of risks and emissions reduction associated with shifts away the current fuel mix, which is more than 90% concentrated worldwide in fossil fuels. Those shifts are discussed vis à vis the policy recommendations of the International Energy Agency on fuel use in the transport sector, and both the business as usual and the low carbon scenarios of the European Commission. In particular, shifting toward an efficient system would involve optimizing the use of biofuels (mostly from endogenous feedstock), with second generation biofuels taking the lead in the long-run, and this combined with electricity from clean sources. This scenario would mean reducing cost volatility by more than 50% as well as CO2 emissions by more than 30% in the long-run. |
| Keywords: | Fuel costs, road sector, efficiency frontiers, mean-variance analysis. |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:ucm:doicae:1218&r=tre |
| By: | Harrington, Winston (Resources for the Future); Krupnick, Alan (Resources for the Future) |
| Abstract: | In September 2011, the National Highway Traffic Safety Administration and U.S. Environmental Protection Agency promulgated the first-ever federal regulations mandating fuel economy improvements for heavy-duty commercial vehicles. While the performance-based approach to these rules offers familiarity and assurances of fuel economy improvements, it also has some well-known weaknesses. In this paper, we describe fuel economy technologies for the trucking sector, its economic structure, the details of the new fuel economy regulations, and the controversies they sparked. We then address issues raised in reviewing the accompanying regulatory impact analysis. Next, we highlight some flaws of this form of regulation and suggests a variety of alternative, more market-oriented approaches that might work better. |
| Keywords: | fuel economy, CAFE, trucks, heavy-duty vehicles, technology-based standards, regulatory impact analysis, RIA |
| JEL: | Q41 Q52 Q55 Q58 R48 |
| Date: | 2012–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-12-02&r=tre |
| By: | Vagliasindi, Maria |
| Abstract: | Poorly implemented energy subsidies are economically costly to taxpayers and damage the environment. This report describes the emerging lessons that could help policy makers to address implementation challenges, including overcoming political economy and affordability constraints. The analysis provides strong evidence of the success of reforms in reducing the associated fiscal burden. For the selected sample of 20 developing countries, the average energy subsidy recorded in the budget was reduced from 1.8 percent in 2004 to 1.3 percent of gross domestic product in 2010. The reduction of subsidies is particularly remarkable for net energy importers. In spite of the relatively price inelastic demand for gasoline and diesel, fossil fuel consumption in the road sector (per unit of gross domestic product) declined in the 20 countries examined from 53 (44) in 2002 to about 23 kilotonnes oil equivalent per million of gross domestic product in 2008 in the case of gasoline (diesel). The most notable decline in consumption was recorded in the low-income and lower-middle-income countries. This reflects the much higher rate of growth in gross domestic product in this group of countries. And it underlines the opportunities to influence future consumption behavior rather than modifying the existing consumption patterns, overcoming inertia and vested interests. Similar trends are recorded for power consumption. While there is no one-size-fits-all model for subsidy reform, implementation of compensatory social policies and an effective communication strategy, before the changes were introduced, made a difference in securing the successful implementation of reforms. |
| Keywords: | Energy Production and Transportation,Transport Economics Policy&Planning,Economic Theory&Research,Environment and Energy Efficiency,Energy and Environment |
| Date: | 2012–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6122&r=tre |
| By: | Shi, Yingying |
| Abstract: | This paper investigates the role of infrastructure capital in China’s regional economic development during 1990 to 2009 in a neoclassical economic growth model. Four types of infrastructure capital are discussed; electricity, road, rail, and land-line telephone. The results support a positive role of infrastructure in improving economic wellbeing in China. It shows that infrastructure has contributed to the convergence among China’s provinces. However, declining growth momentum from rapid increase of road infrastructure, in particular for the Western region, suggests that road development in the region has been growing too fast. The results counter the conventional wisdom of “road leads to prosperity” widely accepted among national and local governments in China. Thus, the seemingly productive infrastructure capital, when invested beyond a proper level or speed, will become unproductive. The results resonate with the theoretical literature on the inverse U shaped growth impact of infrastructure capital and the dominant “crowding out” of private capital if there is too much infrastructure. They also address the puzzle in the current literature debates as to the direction and magnitude of the growth impact of infrastructure capital. |
| Keywords: | infrastructure, economic growth, regional inequality, China, International Development, Production Economics, Public Economics, H54, O18, R11, |
| Date: | 2012–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae12:126547&r=tre |
| By: | Christian K.M. Kingombe (Overseas Development Institute / Graduate Institute of International Studies) |
| Abstract: | Remarkably little is known about the long-term impacts of project aid to lagging poor areas (Chen, Mu et al. 2006, 2008). This paper contributes to the debate about the role of rural transport infrastructure development in explaining the long-term rural development. In line with Grimm and Klasen (2008) we agree that there is value-added to consider this debate at the micro level within a country as particularly questions of parameter heterogeneity and unobserved heterogeneity are likely to be smaller than between countries. Moreover, at the micro level it is possible to identify more precise transmission mechanisms from rural transport infrastructure to socio-economic development outcomes. This is done empirically by analyzing a UNDP&UNCDF financed rural development project in Zambia’s Eastern Province running from 1997-2002. The secondary datasets consist of respectively a series of repeated cross-sectional living conditions monitoring surveys (LCMSs). The LCMSs were collected in 1998 (baseline) and 2004 (follow-up), that is both prior, during and after the project implementation. Our aim is to assess the ability of the parametric and semi-parametric models as well as using a time- series of cross-sections to provide an adequate description of the logarithm of per adult equivalent consumption of rural household conditional on few covariates, including an infrastructure treatment dummy variable. Although, the mean cotton sales share of household income has more than doubled despite the fact that the mean distance to the input market remained unchanged from 1998 to 2004, the parametric and semi-parametric estimation results are only small and statistically insignificant in terms of gains to mean consumption emerged in the longer-term. The main results are robust to corrections for various sources of selection bias. |
| Keywords: | Parametric and Semi-parametric Regression Models; Time-series Model from Successive cross sections; Cohort Data; Poverty Measures, poor rural area development projects, feeder roads, household surveys, impact evaluation, Zambia. |
| JEL: | C14 C21 D12 I32 O1 Q1 |
| Date: | 2012–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:gii:giihei:heidwp10-2012&r=tre |
| By: | Coulibaly, Souleymane |
| Abstract: | The future development of the Tajik economy will be shaped by its comparative advantage on world markets. Exploiting comparative advantage enables an economy to reap gains from trade. Tajikistan's most important comparative advantage is its hydropower potential, which is far larger than the economy's domestic requirements. Yet, high capital costs of building hydropower plants and the unstable geopolitical situation in the transit region to reach South Asian export markets are constraining the realization of this potential. In the short term, the sector, which provides the greatest opportunity for Tajikistan to diversify its exports, appears to be agro-industry and, to a lesser extent, clothing. For both sectors, the main export market is likely to be the regional market. Tajikistan also has a comparative advantage in labor exports, which it has successfully exploited since the mid-2000s. To harness the full potential for labor exports will require improving the skills base of migrant workers and, in particular, their command of the Russian language. In the medium term, the paper argues that an export diversification strategy should tap the agglomeration economies generated by cities. More specifically, establishing Tajikistan's two leading cities, Dushanbe and Khujand, and their surroundings as enclave economies, linked to each other and to major regional markets through improved transport infrastructure so as to minimize production and transportation costs. The two enclave economies should provide the supporting services (finance, logistics, transport and storage) for private sector businesses. In the long term, regional cooperation on trade and transport facilitation could be pursued to reduce transport costs to attractive regional markets such as China, India, Russia and Turkey. |
| Keywords: | Transport Economics Policy&Planning,Environmental Economics&Policies,Markets and Market Access,Economic Theory&Research,Banks&Banking Reform |
| Date: | 2012–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6125&r=tre |
| By: | Fuwa, Nobuhiko; Balisacan, Arsenio M.; Mapa, Dennis; Abad Santos, Carlos; Piza, Sharon Faye |
| Abstract: | This paper analyzes the sources of rural non-farm sector growth in the Philippines, which has become the main driver of rural poverty reduction. We find that agricultural growth has significantly positive effects on service sector growth (with elasticity of about 0.20) but little effects on manufacturing growth, suggesting that rural labor force is sufficiently mobile or capital is relatively immobile across provinces. We also identify different roles played by national road networks, on the one hand, and local roads, on the other. We find that local road facilitates rural service sector development while national road facilitates agricultural growth. |
| Keywords: | sectoral linkages, nonfarm growth, agricultural development, road infrastructure, Philippines, Community/Rural/Urban Development, International Development, |
| Date: | 2012–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae12:126456&r=tre |
| By: | Wang, Sun Ling; Ball, Eldon; Fulginiti, Lilyan E.; Plastina, Alejandro S. |
| Abstract: | This paper uses panel data for the 1980-2004 period to estimate the contributions of public research to U.S. agricultural productivity growth. Local and social internal rates of return are estimated accounting for the effects of R&D spill-in, extension activities and road density. R&D spill-in proxies were constructed based on both geographic proximity and production profile to examine the sensitivity of the rates of return to these alternatives. We find that extension activities, road density, and R&D spill-ins, play an important role in enhancing the benefit of public R&D investments. We also find that the local internal rates of return, although high, have declined through time along with investments in extension, while the social rates have not. Yet, the social rates of return are not robust to the choice of spill-in proxy. |
| Keywords: | productivity, public R&D, R&D spill-ins, extension, road density, internal rate of return, cost function., Agricultural and Food Policy, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, Q16, O3, O4, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae12:126368&r=tre |
| By: | Pradiptyo, Rimawan; Sahadewo, Gumilang Aryo |
| Abstract: | People’s attachment to a subsidy creates difficulties for the government to phase out, and eventually eliminate, the subsidy. Elimination of fuel subsidy scheme in Indonesia is a perfect example of such occurrence. The subsidy has been implementing to commodity as opposed to households, thus individuals may not necessarily realized that they have been enjoying the subsidy when they buy fuel. In this case people may feel as if they are endowed by the values from the provision of the policy. The elimination of the subsidy consequently may be perceived as a loss - as opposed to a foregone gain. This study aims to obtain the most acceptable exit strategy to eliminate the subsidy from the perspective of households by conducting a laboratory-based survey. The alternative exit strategies include methods of elimination of the subsidy and of reallocation of resources saved from eliminating the subsidy. The policy options have been derived using insight from behavioral economics ranging from endowment effect, status quo bias, to present biasness. The survey includes 335 subjects, who come from four different backgrounds: 1) households with no motor vehicle; 2) households with only motorcycle(s); (3) households with one car and; 4) households with one luxurious car or more than one car. Each subject faces 55 paired-wise policy alternatives and the method proposed by Dunn-Rankin (1983) has been used to derive the ordering of preferences. The result shows that gradual elimination of fuel subsidy and reallocation to earmarked programs were the most acceptable policy elements of the exit strategy. The survey, indirectly, showed that subjects’ valuation of losses is greater for direct elimination strategies than that of the equivalent gradual elimination strategies. The results also show that respondents chose “to pay” later at a smaller amount than “to pay” immediately of the equivalent total value. The reallocation of resources saved to earmarked programs is more acceptable than the reallocation to non-earmarked programs. In particular, respondents opted for a more immediate compensation from the elimination or reduction of the subsidy. |
| Keywords: | Fuel subsidy; experimental economics; laboratory-based survey; paired comparison; preference relation; reallocation of resources |
| JEL: | D03 D12 Q48 C91 |
| Date: | 2012–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:40045&r=tre |
| By: | Li, Man; De Pinto, Alessandro; Ulimwengu, John M.; You, Liangzhi; Robertson, Richard D. |
| Abstract: | This paper develops an econometric model to explore the determinants of land use choices for the Democratic Republic of the Congo. The model is not just capable of representing land use choices using large aggregation categories, but it also allocates agricultural area to the country relevant crops by augmenting the dataset with low-cost, widely available, agricultural statistics about crop areas and production. This is important to decision makers who want to plan for economic growth while trying to minimize greenhouse gas emissions. An empirical application indicates that the implementation of an ongoing government’s plan for road construction in the country would cause a reduction of about 2% of the existing standing forest stock, and a loss in biological carbon stock estimated to be 294 TgC. Encroachment of agriculture into forested land would contribute to the reduction in biological carbon stock by an estimated 112 TgC and would generate annual emissions estimated to be 21 thousand Mg CO2e with low nitrogen application or 300 thousand Mg CO2e from high nitrogen application. |
| Keywords: | Land use, deforestation, crop allocation, road construction, greenhouse gas emissions, Community/Rural/Urban Development, Q15, Q24, Q54, |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae12:126672&r=tre |
| By: | Claude Mathys (National Bank of Belgium, Microeconomic Information Department) |
| Abstract: | This paper is an annual publication issued by the Microeconomic Analysis service of the National Bank of Belgium. The Flemish maritime ports (Antwerp, Ghent, Ostend, Zeebrugge), the Autonomous Port of Liège and the port of Brussels play a major role in their respective regional economies and in the Belgian economy, not only in terms of industrial activity but also as intermodal centers facilitating the commodity flow. This update paper1 provides an extensive overview of the economic importance and development of the Flemish maritime ports, the Liège port complex and the port of Brussels for the period 2005 - 2010, with an emphasis on 2010. Focusing on the three major variables of value added, employment and investment, the report also provides some information based on the social balance and an overview of the financial situation in these ports as a whole. These observations are linked to a more general context, along with a few cargo statistics. Annual accounts data from the Central Balance Sheet Office were used for the calculation of direct effects, the study of financial ratios and the analysis of the social balance sheet. The indirect effects of the activities concerned were estimated in terms of value added and employment, on the basis of data from the National Accounts Institute. (...) After the decline seen in 2009, maritime cargo traffic in the Flemish ports reversed the trend and recorded a rise in 2010. Direct value added increased in each of the four ports in Flanders. Both maritime and non-maritime branches as a whole are up. The only decrease in value added occurred in the maritime branches in the port of Ostend and the non-maritime branches of the port of Zeebrugge. Of the six ports, the port of Brussels recorded the strongest growth rate for value added in the maritime cluster, and the port of Ostend recorded the strongest increase in the non-maritime cluster. Direct employment in the Flemish ports as a whole declined during the year 2010. This is true of both the maritime and non-maritime cluster. Except for Zeebrugge, investment decreased in all the Flemish ports. The decline in investment was around 17 percent in the ports of Antwerp, Ghent and Ostend, whereas Zeebrugge recorded a growth rate of more than four-fifths in its investment levels in 2010. The volume of cargo handled in the port of Liège increased in 2010. Direct value added rose slightly, whereas employment registered a significant decline. There were job losses in both maritime and nonmaritime branches. In the non-maritime cluster, investment diminished substantially because of a lack of projects. The volume of cargo handled at the port of Brussels rose in 2010. Both value added and employment increased in maritime branches. Value added in non-maritime branches remained steady but employment contracted. The downturn in investment recorded during 2009 continued throughout 2010. This report provides a comprehensive account of these issues, giving details for each economic sector, although the comments are confined to the main changes that occurred in 2010. |
| Keywords: | branch survey, maritime cluster, subcontracting, indirect effects, transport, intermodality, public investments |
| JEL: | C67 H57 J21 L22 L91 L92 R15 R34 R41 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:docwpp:201207-17&r=tre |
| By: | van den Berg, Vincent A.C. |
| Abstract: | This paper investigates regulation by auctions of private supply of congestible infrastructures in two networks settings: 1) two serial facilities, where the consumer has to use both in order to consume; and 2) two parallel facilities that are imperfect substitutes. There are four market structures: a monopoly and 3 duopolies that differ in how firms interact. The effects of an auction depend on what the bidders compete. With a bid auction, the bidders compete on how much money they transfer to the government. This auction leads to the same outcome as the unregulated game (for a given market structure), since this gives the maximum profit to transfer. An auction on the capacity of a facility leads to an even lower welfare than no regulation, because firms set very high capacities and usage fees. Conversely, an auction on generalised price or number of users leads to the first-best outcome. Moreover, these two auctions are robust: they attain the first-best regardless of whether the facilities are auctioned off to a single firm or to two firms, and for all market and network structures. On the contrary, the performances (relative to the first-best) of the bid and capacity auctions strongly depend on these considerations. |
| Keywords: | private supply; congestible facilities; auctions; serial facilities; parallel facilities; imperfect substitutes |
| JEL: | L51 L13 R42 R41 D43 |
| Date: | 2012–07–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:40103&r=tre |