This discussion of transportation subsidies and free transportation also lists the assumptions that underlie the prescription to price any service and particularly to price the marginal unit or incremental qualtity of any such service at the marginal or incremental cost of supplying it. It is noted that the strongest case for assigning any price presupposes determining the economically efficient price. The arguments for transport subsidies are discussed. Assuming that there is subsidization, at least to some degree, the question is asked if there is any possible aspect of free transportation that could maximize the benefit to be derived from a given subsidy. The two most likely candidates for this kind of freedom appear to be marginal free transportation and differential free transportation.

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    • This paper appeared in Transportation Research Board Special Report No. 181, Urban Transportation Economics. It contains proceedings of Five Workshops on Pricing Alternatives, Economic Regulations, Labor Issues, Marketing, and Government Financing Responsibilities held by Transportation Research Board. Sponsored by Office of the Secretary, Federal Highway Administration, and Urban Mass Transportation Administration of DOT; Environmental Protection Agency; and Federal Energy Administration. Distribution, posting, or copying of this PDF is strictly prohibited without written permission of the Transportation Research Board of the National Academy of Sciences. Unless otherwise indicated, all materials in this PDF are copyrighted by the National Academy of Sciences. Copyright © National Academy of Sciences. All rights reserved.
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    Transportation Research Board

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  • Authors:
    • Nelson, James R
  • Publication Date: 1978

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  • Media Type: Digital/other
  • Pagination: pp 17-20
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  • Accession Number: 00176478
  • Record Type: Publication
  • Files: TRIS, TRB, ATRI
  • Created Date: Nov 14 1981 12:00AM