00129476

Component

http://onlinepubs.trb.org...s/trr/1975/550/550-001.pdf

https://scholar.google.co...frey&publication_year=1975

The consumer surplus concept is based on the price-demand relationship that states that, if the consumer price of a commodity is lowered or increased, then the number of units sold will be reduced when price increases and increased when price decreases, if all other factors remain constant. Consumer surplus is the difference between the total price paid by all customers and the total amount those customers would have been willing to pay. This paper concludes that the consumer surplus concept has not justifiable application in the anlaysis of the economy of highway transportation investment alternatives. This paper is related to only those consequences of highway improvement that are market priced: highway facility costs, motor vehicle running costs, traffic accident costs, and travel time. This paper is not concerned with the decision-making process except to furnish the decision maker with a thorough and reliable analysis of the transportation costs for each alternative considered. Traffic volume composition is discussed, and specific attention is paid to generated, or induced, trips. For the time span of years chosen for the analysis of transportation economy, it is concluded that generated traffic (trips that come into being solely because of the reduction of trip costs) cannot be estimated for the analysis period reliably. Furthermore, estimating consumer surplus is not necessary because total transportation cost of each alternative considered is the only relevant factor. The shift of the price demand as highway design or traffic control changes is discussed. This shift cannot be determined either in scope or direction, and, therefore, the net change in consumer surplus cannot be determined.

Publication of this paper sponsored by Committee on Application of Economic Analysis to Transportation Problems. Distribution, posting, or copying of this PDF is strictly prohibited without written permission of the Transportation Research Board of the National Academy of Sciences. Unless otherwise indicated, all materials in this PDF are copyrighted by the National Academy of Sciences. Copyright © National Academy of Sciences. All rights reserved.

01411408

Spottiswoode, R A; Casstens, R L; Kannel, E J

pp 1-19

1975

Transportation Research Record

54th Annual Meeting of the Transportation Research Board

0309024560

Print

Figures (3) ; References (51) ; Tables (2)

Cost indexes; Costs; Crashes; Economics; Highway design; Highways; Improvements; Motor vehicles; Prices; Traffic control; Traffic volume; Transportation; Travel time; Trip generation

Consumer Price Index

Accident costs

Economics; Operations and Traffic Management; Safety and Human Factors; Society; Transportation (General)

TRIS, TRB

Mar 10 1976 12:00AM

• BENEFIT-COST ANALYSIS OF THE MILWAUKEE FREEWAY SYSTEM
• CLARIFYING THE AMBIGUITIES OF INTERNAL RATE OF RETURN METHOD VERSUS NET PRESENT VALUE METHOD FOR ANALYZING MUTUALLY EXCLUSIVE ALTERNATIVES
• CURRENT HIGHWAY USER ECONOMIC ANALYSIS
• INVESTMENT EVALUATION MODEL FOR MULTIMODAL TRANSPORT CORRIDORS
• SENSITIVITY ANALYSIS OF RATE OF RETURN