FINANCING ROAD CAPACITY AND RETURNS TO SCALE UNDER MARGINAL COST PRICING

It is commonly agreed that the relationship between toll revenue and capacity cost under marginal cost pricing depends on scale economics of the transport system. It is also agreed that, if the user travel cost depends on traffic density only, then what matters is the scale economies in road capacity production. What is disagreed upon is how to measure these scale economies. This article examines this issue within a structural context and concludes that, in measuring the relevant scale economies, factor prices should be kept fixed.

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  • Accession Number: 00618967
  • Record Type: Publication
  • Files: TRIS, ATRI
  • Created Date: Feb 29 1992 12:00AM