A NEW FRAMEWORK FOR THE MICROECONOMIC ANALYSIS AND CLASSIFICATION OF TRANSPORTATION COSTS

Traditional microeconomic theory must be viewed as very oversimplified to the extent of leading to erroneous conclusions, many of which tend to bias investment inefficiently towards the public sector. For example, amortization expenses, properly conceived as fixed costs in the private sector and included in the revenue target, are usually omitted from the public sector revenue goal for many public sector transport activities. Part of the problem arises through the inability of the traditional microtheoretic cost framework (tmcf) to distinguish among the very different types of cost that do arise in reality and its restriction to two-dimensional problems. This paper presents a new framework to analyze cost. Its advantages over the tmcf are: 1) its ability to deal simultaneously with cost variation over time and with cost variation per unit time, something which the tmcf does not do, and 2) its generally more faithful representation of reality. The cost configuration proposed is a disconnected 2-dimensional smooth manifold with boundary. For the covering abstract of the symposium see TRIS 452544. (Author/TRRL)

Media Info

  • Features: Figures; References;
  • Pagination: p. 1-19

Subject/Index Terms

Filing Info

  • Accession Number: 00452545
  • Record Type: Publication
  • Source Agency: Transport Research Laboratory
  • ISBN: 0 8020 2461 0
  • Files: ITRD, TRIS
  • Created Date: Jul 31 1986 12:00AM