This study is a preliminary examination of whether shippers of domestic surface freight pay the full social costs of the services that they use. Freight carriers and shippers do not pay directly for all of the costs of providing freight service. Some costs are borne initially by government, such as the cost of roads and ports that are built and operated by public agencies. Other costs, called external costs, are borne by nonshippers or the general public; these include the health and other damages caused by air pollution and noise generated by trucks, towboats, and locomotives and the traffic delays and congestion that an additional truck or barge imposes on other users of roadways and waterways. Social costs are all costs of the shipment, whether borne initially by the shipper, carrier, government, or public. However, carriers and shippers also pay special taxes and fees--such as fuel taxes or vehicle registration fees--that at least partially compensate for the costs that they impose on others. It is desirable that shippers and carriers pay the full social costs of their freight operations--that is, that the special taxes and fees paid by the shipper or carrier for each shipment of freight be enough to offset the cost to the government of the shipment and the external costs that the shipment imposes on others. This study is intended not to provide definitive answers as to whether shippers pay their full social costs but rather to determine the feasibility of making such estimates. Chapter 1 describes the origin of the study, the study scope and objectives, and some of the public policy questions for which its findings may be relevant. A framework for analyzing subsidies in freight transportation is presented in Chapter 2, and methods and problems of estimating each major component of subsidies are described in Chapter 3. Subsidy estimates for case study freight movements, designed to highlight conceptual issues and data requirements, are given in Chapter 4. Chapter 5 contains a description of ways in which more refined estimates of subsidies could aid decision making on taxation, public investment, and regulation. Recommendations are presented in Chapter 6.


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  • Accession Number: 00725600
  • Record Type: Publication
  • ISBN: 0309062179
  • Files: TRIS, TRB, ATRI
  • Created Date: Sep 18 1996 12:00AM