Monopoly and optimal nonlinear pricing: the case of route monopolies and heteregeneous demand in the air transport market

This paper explores the robustness of the one-dimensional screening model with respect to increasing the number of instruments and the number of characteristics. We study a case of nonlinear pricing (2 instruments (2 routes on which the airline provides customers with services), 2 characteristics (demand of services on these routes) and two values per characteristic (a low or a high demand of services on these routes)) and we show that none of the conclusions of the one-dimensional analysis remain valid. In particular, upward incentive compatibility constraint may be binding at the optimum. As a consequence, they may be distortion at the top of the distribution. In addition to this, we show that the optimal solution often requires bundling, while it is sometimes optimal for the monopolist to produce only one good or to exclude some buyers from the market. This means that the monopolist cannot fully apply his monopoly power and is better off selling two goods independently. We define all possible solutions in the case of a quadratic cost function for a uniform distribution of agent types and demonstrate that the range of services proposed by an airline is often larger than the corresponding range in demand.     

Road pricing in National Parks: a case study in the Yorkshire Dales National Park

Road user charging is typically associated with urban contexts, however, congestion at rural attractions is of increasing concern and road user charging may be considered as a suitable policy instrument. This paper investigates the issue of rural road pricing and presents the results of a survey of car-based visitors to Upper Wharfedale in the Yorkshire Dales National Park, which explores the potential impacts on mode and destination choice of a road user charging scheme, combined with a park and ride alternative. The scheme was found to be acceptable to 68% of the respondents, with nearly half opting to park and ride. The results are of particular interest in the light of the 1998 Transport White Paper that encourages pilot road user charging schemes in rural areas.     

How persuasive is ‘free’ public transport?: A survey among commuters in the Brussels Capital Region

In Belgium, several cities have been experimenting with ‘free’ public transport based on the concept of a third payer system. This study explores the modal shift potential of this measure for commuters by means of a large-scale survey. The results indicate that there is still a margin for a further modal shift, but in order to make public transport more attractive to car users, the price paid by the commuter should be lowered, the quality and capacity of the public services should be improved and the mobility policy of the companies should be adjusted in favour of public transport.     

A study on travelers' transport mode choice behavior using the mixed logit model: A case study of the Seoul-Jeju route

This study is to analyze passengers' choice of the mode of transportation when air transportation is in competition with high speed rail (HSR). The Seoul-Jeju route analyzed as an empirical case study, in which the construction of an undersea tunnel to connect Seoul and Jeju city by HSR has been considered. The study also included two new variables, ‘safety of transportation’ and ‘availability of duty free shopping’ in addition to traditional transport choice variables such as travel time, travel costs and frequency of service to reflect special characteristics of the market. As data gathering tools, SP techniques and mixed logit model, for analytical methodology, were utilized. The authors found that the goodness of fit of the models was improved with new variables. The models also showed that the characteristics of business passengers and leisure passengers in choosing the mode of transportation were different. Business passengers were apt to choose a safety secured mode of transportation regardless of fare while leisure passengers preferred to use duty free shops more than business passengers.     

The politico-economic link between public transport and road pricing: An ex-ante study of the Stockholm road-pricing trial

A full-scale road pricing trial will be performed in Stockholm for 7 months in 2006. The road tolls are bundled with major improvements of public transport. The trial will be followed by a local referendum. We conduct numerical simulations with a model of modal choice to estimate the welfare effects of road tolls on commuters crossing the toll zone. We find that in the absence of revenue recycling, few commuters gain from the road-toll reform. However, the fraction of gainers rises considerably when public transport is improved as planned in Stockholm.     

A case study of flexible solutions to transport demand in a deregulated environment

Since public transport deregulation in the UK the provision of solutions to transport demand in areas of dispersed demand has been met by local authorities’ attempts to “fill gaps” in the commercial public transport network, whilst the voluntary sector has addressed the needs of more specialised travel. Over the last five years more innovative solutions have been enabled by the development of Intelligent Transport Systems (ITS), which allow more flexible transport services in terms of time and space. In addition, new ways of thinking about the provision of what might be considered public transport has led to more flexible transport modes becoming available, permitting the general public on education contract services, the use of taxis for shared public transport and the provision of vehicles enabling access to work. However, these innovations tend to operate independently leading to overlap, gaps and misunderstandings about the purpose, delivery and receipt of services. To address these issues, future public transport services will need wider area network planning, greater co-operation between service providers (e.g. in the form of partnerships) and improved understanding of passenger requirements. The case study of Northumberland presented in this paper embodies many of the problems faced by residents in rural areas of the UK to-day and illustrates diverse solutions that have been made to address these challenges.     

Business connectivity,air transport and the urban hierarchy: A case study in East Asia

This paper explores the effect of business connectivity between cities on their air traffic connections, and in turn on their place in a region's urban hierarchy. Its focus of attention is East Asia, where economic development is underpinned by a complex set of international flows of trade and investment. Business connectivity is a key part of these flows. The research incorporates a measure of business connections in a regression model that previously relied on GDP per head, population and distance to account for international air links. Results confirm that business connectivity is a more important influence on the level of international air links within East Asia, and plays a major role in explaining the changes in city rank over time. The paper concludes with suggestions that possible incorporation of domestic air travel (itself larger than the intra-regional flows in this region) could enrich the insight of this approach.     

Ramsey pricing in practice: the case of the Norwegian ferries

The article develops a cost model for ferry operators, which enables us to estimate how long-run marginal costs for transporting different categories of vehicles are related to trip lengths. The model is estimated using cross-sectional data from 64 ferry services in Norway. The present fare system for the ferries is then compared with marginal costs and with Ramsey fares with the presumption that the ferries' subsidy needs are at today's level. Ramsey pricing implicates steeper relationships between fares and trip lengths than present fares, in particular for heavy vehicles. Consequently, fares based on general principles of economic welfare should, under present financial constraints for the ferry operators, lead to lower fares for short journeys and significantly higher fares for long journeys.     

Effects of non-aeronautical activities at airports on the public transport access system: A case study of Zurich Airport

Many planning authorities and airports study measures to increase public transport use for airport ground access and egress. At the same time, an increase in real estate development at and around airports is occurring, both due to airports seeking new revenue possibilities and other developers attempting to profit from high value locations. This paper considers non-aeronautical activities at large airports, largely commercial centres and transit hubs, as land uses that have the potential to improve the situation for operating public transport services. In order to assess potential benefits and disadvantages, four research questions are considered: (1) Can the additional travel volume reach levels at which it has a significant impact? (2) To what extent do non-aeronautical activities influence the public transport access system? (3) Is the resulting demand distribution better or worse regarding peaking behaviour? (4) Is there a potential for the resulting overall demand to bring about capacity shortages?A case study is conducted at the airport of Zurich, Switzerland, which finds that non-aeronautical activities in the direct airport vicinity have led to a situation where the operation of public transport services is much more viable due to overall higher passenger numbers and a more even distribution throughout the day. It is concluded that locating non-aeronautical activities at airports can, in addition to providing commercial benefits to developers, lead to a situation where improved public transport services become feasible.     

Urban taxis and air pollution: a case study in Harbin, China

Taxis share a high proportion of urban traffic volume and contribute a large proportion to urban air pollution. This paper addressees this context by exploring urban taxi air pollution emissions and possible reduction countermeasures. Based on a survey of Harbin taxis, we have developed different urban taxi pollution emissions models and considered taxi passenger occupancy and taxi average vacant ratio. To reduce taxi air pollution emission, this paper sets a reduction goal and puts forward three kinds of transport management policies. These are taxi market regulation, introduction of electric and Liquefied Petroleum Gas powered vehicles, and the introduction of dial-a-ride services. The paper provides recommendations for managing urban taxi development using these strategies.     

The role of perceived acceptability of alternatives in identifying and assessing choice set processing strategies in stated choice settings: The case of road pricing reform

In designing choice experiments, it is common to present a number of alternatives to a respondent and have them choose the most preferred alternative. However, respondents may ignore one or more alternatives which they deem unacceptable for various reasons. This possibility aligns with the idea of the ‘consideration set’ which influences the choice of an alternative given the choice set of interest. This paper uses an endogenous choice set model to investigate the influence that contextual effects and socioeconomic characteristics play in explaining variations in the choice sets considered by respondents when they reveal their preferences.     

Assessing the interaction between transport policy targets and policy implementation—A Finnish case study

This article explores the potential of a target analysis method in acting as a link between policy objectives, targets, measures and their implementation in order to intensify the policy process. The context is the information-abundant policy environment where feasibility conditions keep constantly changing. The policy process frameworks for bounded rationality and experiential incrementalism are used as a basis for exploration and complemented with our target analysis, which is tested with a case of Finnish transport policy targets. We argue that by studying synergies and conflicts as well as other dependencies between the targets presented in policy statements and also by examining the possible support or opposition of main stakeholder groups for the policy measures to meet the targets, we can appraise the potential success of the transport policy implementation. Our case study, the Finnish transport policy, presented targets with quite a clear direction, with a lot of weak synergies and only a few serious conflicts. The implementation of the policy measures, presented to meet these targets will, however, be demanding because of several reasons related to the challenges to governance that are emerging from the complex and continually changing linkages between and among transport (policy) problems, targets and their consequences. The method we presented and tested proved to be useful in bringing transport policy targets closer to policy implementation by considering policy measures to meet the targets and their acceptance as a part of the target or objective analysis process. The findings suggest that linking these often detached parts of the policy process together the co-ordination will be improved and the process hence intensified. The target analysis presented could act as an originator for a more open, interactive and particularly systematic process in transport policy formulation, leading through social learning into a more successful implementation of policies.     

Spatial and socio-economic analysis of public transport systems in large cities: A case study for Belo Horizonte,Brazil

The main goal of this article is to evaluate the relationship between the spatial distribution of the population of the city of Belo Horizonte, one of the largest cities in South America, and its public transport network, seeking to ascertain whether the current bus network is able to meet the needs of the population. The methodology was based on data processing and vector information from different sources through spatial analysis tools. As expected, the results revealed a greater concentration of routes and bus stops in the central region of Belo Horizonte, which is the main commercial center of the municipality and its metropolitan region. However, the results suggest evidences of a disadvantage for the population with lower income, especially those living on the periphery. A possible explanation for this disadvantage is the invisibility of these communities due to their high level of irregular occupation. Under the eyes of public transport planning, they are not recognized, and, theoretically, do not generate demand for lines and bus stops     

Enhancing Park and Ride with access control: A case study of Southampton

Implementing and promoting more sustainable forms of urban transport are key policies of Local Authorities throughout the UK. Park and Ride (P&R) is one such system implemented widely in the UK, especially in historic towns and cities with limited road and parking space in the centre. Some cities (e.g. Rome and London) have also implemented forms of ‘access control’ to reduce congestion and/or pollution in central areas. This paper describes a feasibility analysis of a unique application studied for potential implementation in Southampton—the integration of P&R with access control on a key corridor in Eastern Southampton where traffic demand is likely to increase significantly in the coming years because of new housing developments. The system concept is a P&R facility with express buses to the City centre, keeping the corridor free-flowing for these buses (and other traffic) using a combination of bus lanes and access control.Following an outline of the policy context and system design, this paper then describes the corridor and network modelling undertaken to predict the impacts of the scheme and alternatives of it. This has been based mainly on the CONTRAM dynamic traffic assignment model, which covers the whole of Southampton and its surrounding motorway network. The assessment of the benefits of the various options in this scheme showed that the combination of P&R with signalised access control was the best option to improve the movement of people on the corridor. The paper concludes with a discussion of potential issues for implementation, including the need for complimentary measures and a consistent policy framework.     

Time efficiency assessment of ship movements in maritime ports: A case study of two ports based on AIS data

Operational efficiency of a maritime port is an important issue for shipping lines and port authorities. It is desirable to move ships in and out of a maritime port as efficiently as possible. Automatic identification system (AIS) data recording the trajectory of ship movements allow us to assess the operational efficiency as ships move in and out of a port. This study proposes a time efficiency assessment framework that evaluates the amount of time each ship spends in the different areas within a port (i.e., berth, anchorage, and fairway) based on the space-time trajectories of ship movements derived from AIS data. According to the statistical distributions of time spent by different types of ship in each port area, the proposed framework can compare time efficiency across different zones within a port and between different ports. This study uses AIS data of four types of ships (i.e., container, cargo, tanker, and passenger ships) at two selected ports in China, Shanghai Yangshan Port and Xiamen Port, to demonstrate how the proposed approach can effectively assess and compare time efficiency levels of ship movements between the times entering and leaving the vessel traffic service (VTS) lines of a port. This study demonstrates the value of deriving space-time trajectories from AIS data based on the concepts of time geography to assess time efficiency levels of maritime ports and monitor their performance over time, which offer useful information to both shipping lines and port authorities for operations such as efficient scheduling and logistic support.     

Competition of high-speed train with air transport: The case of Madrid–Barcelona

This paper analyzes the potential competition of the high-speed train with the air transport between Madrid and Barcelona. The analysis estimates disaggregated mode choice models using information provided by mixed revealed and stated preferences database. We obtained different willingness-to-pay measures for improving service quality. In general, values for travel time savings are higher for mandatory trips and increases as the level of comfort falls. We also obtained a high willingness-to-pay estimate for reductions in delay time, being higher in the case of high-speed train than for air transport. Demand responses to various policy scenarios that consider the potential competition between high-speed train and air transport are examined.     

Impact of transport pricing on quality of life, acceptability, and intentions to reduce car use: An exploratory study in five European countries

This paper examines how a transport pricing policy aimed to reduce car use may affect individuals’ Quality of Life (QoL), to what extent this policy is acceptable to the public and if people intend to change car use when the policy is implemented. Also, comparisons were made amongst five countries (Austria, Czech Republic, Italy, The Netherlands and Sweden). An internet survey among 490 respondents showed that a stringent measure, i.e., doubling costs of car use, hardly affects people’s general QoL. Respondents are unsure whether they would accept the policy and whether they intend to change their car use if the policy is implemented. Respondents from The Netherlands and Sweden are more pessimistic about the QoL consequences of the policy, think the policy is less acceptable and are less inclined to reduce car use than respondents from the Czech Republic, Italy and, to a lesser degree, Austria. Implications and recommendations for developing, adjusting or supplementing QoL measurement instruments and policies are discussed to ensure effective and efficient policy making.     

Exploring public transport equity between separate disadvantaged cohorts: a case study in Perth,Australia

This paper explores the equity distribution of public transport for three separate disadvantaged cohorts including elderly residents, low-income households and no-car households for Perth, Western Australia. It also undertakes a city-wide equity analysis of Perth and compares this with a published analysis for Melbourne. Overall the public transport distribution of the three socially disadvantaged groups was identified to be less equitable when compared to the population as a whole. The elderly had the most inequitable distribution of population relative to other cohorts. Perth’s population exhibits a 0.52 Gini coefficient suggesting a relatively unequal spatial distribution of services to the population. However, this is much better than Melbourne (at 0.68). Results imply that 70% of Perth’s population have only 33% of services supplied, whilst in Melbourne this figure was 19%. Policy implications and areas for future research in this field were identified.     

A strategic appraisal of the attractiveness of seaport-based transport corridors: the Southern African case

The past decade has brought significant growth at, and competition between regional gateway ports and intermediate hub container ports in Southern Africa. Corridors are the essential link between these ports and continental hinterlands. Capacity expansions of seaport and corridor networks (resources), in conjunction with efficient transport services/operations (capabilities) are important to guarantee the attractiveness of a port–corridor combination. This paper focuses on the attractiveness of three Southern African container gateway port corridors (Southcor, Natcor, and Trans-Kalahari Corridors), all contesting the same continental hinterland, namely, Gauteng. By means of a corridor stakeholder survey, this study merges the corporate strategy concept of resource and capability appraisal, with various theoretical principles of corridor attractiveness. The resultant adapted resource and capability corridor appraisal model is then applied to the three corridor cases in question. Consequently, this study presents an empirical framework which identifies each corridor’s key strengths, key weaknesses and the extent to which each corridor is deemed ‘attractive’ by its stakeholders. Furthermore, this study reconciles theoretical assumptions of corridor attractiveness against actual perceptions of corridor attractiveness from surveyed stakeholders.     

Real option analysis of aircraft acquisition: A case study

This paper demonstrates that aircraft acquisition by airlines may contain a portfolio of real options (flexible strategies) embedded in the investment's life cycle, and that if airlines rely solely on the static NPV method, they are likely to underestimate the true investment value. Two real options are investigated: i) the “shutdown-restart” option (a carrier may shutdown a plane if revenues are less than costs, but restarts it if revenues are more than costs), and ii) the option to defer aircraft delivery. We quantify the values of these options in a case study of a major U.S. airline. The economic insight could help explain observed capital expenditures of airlines, and serve as a rule of thumb in evaluating capital budgeting decisions. A compound option (consisting of both the shutdown-restart and defer options) is also analyzed.