GENERAL DISCUSSION

THE PAPERS PRESENTED AGREE THAT ALL OPPORTUNITY COSTS MUST BE TAKEN INTO ACCOUNT IN HIGHWAY INVESTMENT DECISIONS AND IN PRICING DECISIONS. PROFESSOR BROWNLEE STATED THE CONDITION THAT MUST BE FULFILLED IN ORDER FOR HIGHWAY INVESTMENT AND PRICING TO BE OPTIMAL IN AN ECONOMIC SENSE. VIEWING THE HIGHWAY FUNCTION IN TERMS OF THE ECONOMY AS A WHOLE, RATHER THAN AS AN ENTITY HAVING NO CONSEQUENCES FOR RESOURCE ALLOCATIONS IN OTHER AREAS, HE IMPLIES THAT FAR MORE CONSIDERATION MUST BE GIVEN TO THE RATES OF RETURN WHICH CAPITAL CAN EARN IN OTHER EMPLOYMENTS AND TO IMPUTED PROPERTY TAXES ON HIGHWAYS, IF COMPAIRSONS OF PRICES AND COSTS ARE TO YEILD FULLY ECONOMIC HIGHWAY INVESTMENTS. A SECOND POINT GENERALLY RECOGNIZED IS THAT HIGHWAY USERS SHOULD PAY HIGHWAY COSTS. THE ECONOMIC CRITERIA FOR HIGHWAY INVESTMENT WAS REVIEWED BY KUHN. THE MUTUAL DEPENDENCE OF ENGINEERS AND ECONOMISTS ON ONE ANOTHER IS ILLUSTRATED IN SEVERAL PAPERS. TWO INFERENCES WERE DRAWN FROM MARGINAL COST PRICING: (1) NO GEOMETRIC NEED BE CONSIDERED AS SPECIAL LONG-TERM MARGINAL COSTS FOR THE HEAVY AND LARGE VEHICLES, AND (2) THE WEIGHT COSTS THAT ARE SEPARABLE FOR THE HEAVY VEHICLES DO NOT IMPOSE SHORT-RUN MARGINAL COSTS WITH USE BY SUCH VEHICLES SINCE HIGH VOLUME ROADS ARE DESIGNED FOR AN INFINITE NUMBER OF REPETITIONS OF A LEGALLY PERMISSIBLE MAXIMUM AXLE LOAD. THE ASSUMPTION OF KAFOGLIS THAT ALL GEOMETRIC COSTS ARE COMMON, SINCE HIGHWAY CAPACITY IS CREATED ON BEHALF OF ALL VEHICLES, APPEARS TO REQUIRE ADDITIONAL ENGINEERING CONFIRMATION. IT WAS MADE OPERATIONALLY CLEAR HOW IMPORTANT ELEMENTS OF HIGHWAY COSTS VARY WITH VEHICLE DIMENSIONS AND HIGHWAY USE. IT IS CONTENDED THAT HIGHWAY COSTS MUST ULTIMATELY BE EXPRESSED IN TERMS RELEVANT TO ECONOMIC REASONING IF OPTIMAL HIGHWAY INVESTMENT AND UTILIZATION ARE TO BE STIMULATED. THE ECONOMIST'S IDEAL IS THAT HIGHWAY SERVICE PRICES SHOULD EQUATE WITH MARGINAL COST. ALL COSTS, INCLUDING OPPORTUNITY COSTS, MUST BE COUNTED.

Media Info

Subject/Index Terms

Filing Info

  • Accession Number: 00200995
  • Record Type: Publication
  • Files: TRIS, TRB
  • Created Date: Aug 3 1970 12:00AM