Transport economics

Transport economics is a cross-disciplinary study linking civil engineering
and economics. Transport economics differs from some other branches of
economics in that the assumption of a spaceless, instantaneous economy does
not hold. People and goods flow over networks at certain speeds. Demands
peak. Advanced ticket purchase is often induced by lower fares. The networks
themselves may or may not be competitive. A single trip (the final good from
the point-of-view of the consumer) may require bundling the services
provided by several firms, agencies and modes.

One difficulty is the valuation of time, time is valued differently in
different societies and also by different strata in the same society. Higher
speeds in any mode are often justified by the time drivers or passengers can
be expected to save, but these traveller flows have to be estimated with
some confidence ahead of the provision of the faster - or more frequent -
service. Added speed will have implications for both the design of the
vehicle and the infrastructure it needs on the ground, but it might
negatively impact energy efficiency, safety and perhaps elements of the
environment through which it passes. The valuation of time and the
identification of trends in that valuation are therefore key factors in
assessing whether investments in transport facilities are economically
worthwhile. The geographic, environmental and social impacts of changed
transport networks have been much better appreciated since 1975, in
particular an awareness that enlarged network capacity actually generates
trips that would not otherwise have been made has grown. See Smart growth.
The provision of an upgraded transport network usually requires a disruption
of the present network for months or even years, whether that upgrade is
stimulated either by wear-and-tear, safety considerations, land-use change
or a decision to uprate capacity. In some cities, especially in Europe, the
redistribution of roadspace in favour of pedestrians, buses, trams or cycles
has reversed the historic tendency for the faster modes to prevail. Some
historic networks, such as canals or rural railways have even been restored
as heritage attractions, following generations of neglect. Such re-opened
facilities usually aim to attract nostalgic tourists as well as to perform a
limited transport function.

The regulation of public transport is often designed to achieve some social,
geographic and temporal equity as market forces might otherwise lead to
services being limited to the most popular travel times along the most
densely settled corridors of development. State, regional or municipal taxes
are often deployed to extend timetables through the daytime, weekend,
holiday or evening periods and to intensify the mesh of routes above that
which a lightly regulated market would probably provide. Franchising may be
used to strike a balance between frugal operations and a socially acceptable
array of services supportive of an area's economic life. Agile people able
to buy private transport facilities often resent paying taxes to support
transit options for their fellow citizens.