THE PLACE OF SUBSIDIES IN AN OPTIMUM TRANSPORTATION SYSTEM

IN THE FREE ENTERPRISE WORLD OF ECONOMIC THEORY FOUR DISTINCT GROUNDS FOR SOCIALLY DESIRABLE SUBSIDIES ARE GENERALLY ENUMERATED: (1) ECONOMIES OF SCALE, (2) INDIVISIBILITIES, (3) "SECOND BEST" CONSIDERATIONS, AND (4) SOCIAL CONSIDERATIONS. MANY STUDENTS OF TRANSPORTATION ECONOMICS HAVE PRESENTED ARGUMENTS THAT WOULD SEEM TO JUSTIFY GENERAL TRANSPORTATION SUBSIDIES OR SUBSIDIES TO PARTICULAR COMPONENTS OF TRANSPORTATION ON GROUNDS OTHER THAN THESE FOUR COMMONLY ACCEPTED ONES. FOUR OF THESE ARGUMENTS ARE PRESENTED. THROUGH THE USE OF SOME SIMPLE MATHEMATICAL MODELS IT IS DEMONSTRATED THAT THESE COMMON AND SEEMINGLY PLAUSIBLE ARGUMENTS DO NOT PROVIDE AN ECONOMIC FOUNDATION FOR A GENERAL POLICY OF TRANSPORTATION SUBSIDY; THE BASIC ECONOMIC CONDITIONS ARE GENERALLY REGARDED AS JUSTIFYING SUBSIDY; AND THE LIMITED AVAILABLE EVIDENCE CONCERNING PRESENCE OF THESE SUBSIDIES JUSTIFY THESE CHARACTERISTICS IN TRANSPORTATION ACTIVITIES. /AUTHOR/

Media Info

  • Media Type: Print
  • Features: References;
  • Pagination: pp 103-113
  • Monograph Title: Highway financing
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00200902
  • Record Type: Publication
  • Files: TRIS, TRB
  • Created Date: Sep 28 1970 12:00AM