Реферат: Traffic Congestion As Market Failure Essay Research
Название: Traffic Congestion As Market Failure Essay Research Раздел: Топики по английскому языку Тип: реферат |
Traffic Congestion As Market Failure Essay, Research Paper ??????????? Congestion comes about when the actual journey times taken by transport users are in excess of their normal expectations. Congestion can have many consequences other than increased journey time, the stress caused by it can be the cause of road rage, as well as the increase in harmful emissions having detrimental effects to the areas buildings, air quality and quality of life of all involved. ??????????? Congestion more simply is caused by too many cars chasing too little road space. The demand for this mode of transport has far exceeded the supply. The increase in incomes and relative fall in the price for cars has led to the higher number of cars on the road. The supply for road use is fixed in the short run as it cannot be transferred; the roads are not constantly congested, it is only during peak times, the empty roads of the night and day cannot be transferred to the busy periods of morning and tea-time. In the long run another road could be built. In more economic terms congestion is a mixture of externalities, information failure and transaction cost. Negative externalities exist as the car produces emissions, which are harmful to the environment, the wear and tear of the roads, and the opportunity costs are not included in the monetary costs of motoring. They are also mutual externalities as the drivers are both the cause of the congestion; the victim of those in fronts decision to drive and the cause to those behind. Information failure is apparent as if information of delays and congestion could be relayed, alternative routes could be taken and congestion reduced. However the market does not give such signals, this could never be a perfect solution, as the congestion would eventually transfer to the alternative route, an alternative may not always be available anyway.? The transaction cost can not be possible in road use as a market solution of using price to allocate road space is not practical because you can not pay the person in front of you in a traffic queue for their space. The administrative solution of first come first served is used. Transaction costs could be done in the form of tolls, but these have impracticalities. Congestion in urban areas can be seen as a form of market failure because the socially efficient output is not produced. The social optimum amount of vehicles on the road must be exceeded if congestion results. The marginal cost to the consumer is the only cost really considered when a driver makes the decision to use the car. What is not taken into account are the costs to other road users, the cost to society collectively; the social cost or themselves to some extent. The marginal cost to other road users is the added congestion caused by the extra car on the road. The marginal costs to society collectively are the increase in emissions produced by the extra journey made, the follow on effects from this are large, rising asthma levels in the local area, decaying buildings and collapsing roads could be caused because of the high congestion rates. The marginal cost to the individual could be the opportunity cost of the time spent in congestion. If the more space efficient bus made the journey, the traveller would be able to read the newspaper, play on a hand held computer or even do some work, this is not possible if the car is chosen to make the journey. The marginal utility of existing users of the congested roads would decrease with the addition of an extra motorist, an extra 10 or even 100 motorists would lower the marginal utility levels dramatically. But each individuals marginal cost wouldn?t be effected, which explains why the marginal cost and marginal social cost diverge. This can be shown by the graph that shows the social optimum level of vehicles; where the marginal social cost equals the marginal social benefit. Journey Costs & benefits ??????????????????????????????????????????????? Number of vehicles on roadThe dashed line represents the socially optimum level of vehicles on the road and the marginal utility of the user. ?A higher level of vehicles on the road, shown by the dotted line, shows a larger marginal social cost, marginal social benefit and lower marginal utility gained.In order to reduce or eliminate the market failure of congestion, it is necessary for attempts to be made at reducing the number of cars on the road, so the number is nearer the social optimum. ?There are problems involved with identifying the social optimum number of cars, mainly due to the lack of information concerning the outputs of each car, the monetary cost of damage done, and whether the car is definitely to blame for such damage. This is the reason the externality cannot simply be taxed or charge to the producer, it is too hard to know which car contributed to most of the damage and harder to prove so in order to receive the necessary charge. This is why the general number of cars on the road has to fall. b). Discuss the economic arguments for using revenue from road pricing schemes to support passenger transport systems in congested urban areas. (12) ??????????????? ?Inorder to reduce the number of cars, which use the roads in congested areas, there have been many options for the government of the day to introduce. The most commonly used is to simply increase the costs of motoring in general. This can be done through the increase in the amount of which a tax disc cost levies on fuel, the initial purchase on a car and other general ways to increase the cost of motoring, have failed. They often punish those who may not deserve to be as much as others. The increase in fuel may have little effect in reducing the congestion in urban areas whilst it infuriates the motorist in the country where it is not congested but also not possible to travel by other means at times. The increasing of the initial motoring costs is unlikely to deter people to make an extra journey; it may have the opposite effect whereby people make more journeys to get? ?value? for the large outlay of the car. The problem of congestion lies in busy cities, town centres and the surrounding roads. The discouraging of people to make the additional journey could ease the problem of congestion by car, especially the short journeys of in and around the town or city. The negative externalities produced by cars are worsened when the car is in traffic, not when driving at a normal motorway speed. As the main problem of car use is caused by slow moving traffic in built up areas, it would be wise to address that as the problem and attempt to combat it. Road pricing would basically involve the charging of motorists to use the roads in and around the congested urban areas. It is hoped that by charging motorists to use the road space, they would make alternative arrangements to travel; walk, cycle, share a car or use public modes of transport such as buses. ?The reduction of cars on the road would inevitably lead to a reduction in congestion and therefore the problems it causes. Road pricing can be done in a number of ways, and technology advances have allowed these ways to be varied and efficient. In Oslo road pricing was introduced by placing a toll ring around the city centre, 19 toll stations were placed in Oslo located on every access road to the city centre. 8 of the toll stations are on main roads and the remaining 11 are on minor roads. The stations have lanes for conventional payment to gain access to the road, they also have lanes for electronic payment, done through a chip placed in the subscribers car which is automatically registered and charged the relevant amount, this saves queues at the toll stations and congestion once more. The success of the scheme can be seen through the increased number of electronic subscribers. Other positive outcomes of the scheme include the increasing use of public transport, of which quality has improved as well as the journey time that has been increased due for the both public and private transport users. The increase in public transport has occurred through the increased marginal cost of motoring in Oslo. There have been environmental advantages as a result of the reduction of cars and congestion around the city. Bergen implemented a road-pricing scheme with the specific aim of decreasing private car usage alongside the aim of increased public transport use. This was done so through the use of toll rings. They since doubled the initial cost as well as differentiating the charges in accordance with the time of day. It did not have the impact so required as the price charged may have been too low, seeing how price inelastic the demand for motoring is, also the public transport system may not have been an attractive alternative. The Oslo example shows how road pricing can be very effective if done correctly and if viable alternative methods are available. The Bergen example shows it is not an overnight remedy for congestion. The question remains of how the government should use the revenue created from road pricing. The revenue could be used to build more roads or to cover the cost of a new road, such as the A1 in France where road-pricing revenue helped to redeem the initial expenditure. ?If road pricing schemes are introduced in order to promote the use of public transport whilst discouraging the private motorist, it is surely only natural that the revenue received should be used to boost the public transport available. How the money would be used to boost public transport would be a point for discussion. As the majority of bus operators are private, and thus profit making firms, government subsidies for them to improve service may just end up subsidising the supernormal profits of the bus operator. This would be done, as the costs would be lowered, as the government would have subsidised them to ensure service is provided. Whether the service would be of a high enough quality is questionable if the firm?s sole aim is profitability. The bus operator only operates the profitable routes, with government subsidies, the unprofitable routes from the rural areas etc. whereby car essential is seen as a must could be run. This would have social benefits because of the reduction in pollution and more people travelling by bus achieve a more efficient use of road space. The revenue earned by the transport system could be ploughed back into the transport system, known as hypothecation, in other ways than simply subsidies. The revenue could be used to set up and provide better regulations by which the bus companies must adhere to, quality of vehicles, promptness, and access for disabled/children all high on the objectives that the firms must meet. This should ensure the quality of the buses is of such a standard that it is a genuine alternative to private motoring. The revenue could be used to subsidise the cost of public transport by the government distributing vouchers directly to motorists to use the public transport system, this would be done in return for not using private transport. There are equality arguments in road pricing and hypothecation. It has been argued that road pricing discriminates against the poor whilst the well off motorist is seemingly unaffected by it. The reverse is that it ignores those who cannot afford a car in the first place, they may be the ones who suffer the most from the negative externalities of the car whilst not being able to enjoy the benefits. Those people have been said to benefit disproportionately by the improvements made to the passenger transport systems, done so through hypothecation. In conclusion, if there were substantial evidence that using public transport will become not only more comfortable and pleasurable but also cheaper as a result of road pricing and that it was to become a serious alternative to private motoring, then it would be seen as a more popular introduction. Until then, governments may continue to put off the passing of legislation that would allow road pricing, as it may put them in an unfavourable position with the electorate. 34f |