An airport’s capacity is in general indivisible and hence cannot be adjusted continuously, while the demand for airport services tends to increase over time as with the growing economy. Consequently, when new runways are completed, they are likely under-utilized, but as traffic increases over time, congestion occurs. It may therefore be optimal to vary airport charges over time by keeping charges low at the early stage of the infrastructure life cycle and raising charges towards the end of its life cycle. This chapter discusses the benefits of time-dependent charges by considering the airport’s economic impacts as well as the changing economic environment, such as the unemployment level. The analysis is based on a case study of Hong Kong International Airport. The authors attempt to demonstrate quantitatively the above airport pricing strategy, and to further show how to conduct a real-case cost-benefit analysis of airport pricing for policy application.
Browse by title
Keisuke Sato and Atsushi Koike
The Spatial Computable General Equilibrium (CGE) model is one of the powerful tools to understand the regional economic effects on transport development. In this model, Armington elasticities are known to be important for the properties of model behavior but are seldom estimated empirically in the domestic area. Armington elasticities in multi-regional trade in Japan are estimated in this chapter. The estimated elasticities are intended for use in the Spatial CGE model for transport policy. The authors suggest that estimation is possible for Japan, for which economic data are generally considered poor, provided appropriate account is taken of transport cost.
Zhenhua Chen and Kingsley E. Haynes
Transportation investment policy faces an unprecedented critical moment especially when traditional public funding sources shrink. How to allocate the limited funding source among different modes of transportation infrastructure to maintain their quality and function is not only a challenging decision, it also requires the knowledge and understanding of the relationships between transportation infrastructure and regional economic development. This study conducts a comparative assessment investigating this relationship with a focus on a multimodal perspective. Through the comparison of the authors’ previous evaluation studies conducted at different geographic scales in the US and using different data and methodologies, the regional economic impacts of different modes of transportation infrastructures are contrasted and discussed. Although transportation infrastructure is found to have a consistent positive impact on regional development across different studies, the effects vary considerably among different modes of transportation. Issues of impact assessment and policy implications are raised and discussed.
Kiyoshi Kobayashi and Masamitsu Onishi
This chapter focuses on the competitive relationships among shopping districts that consist of small-size retail shops in cities, and other shopping districts or shopping centers. When consumers shop in multiple retail shops, a correlation among the profits of each shop arises through consumer behavior with respect to choosing a shopping district. When there are such demand externalities, the decentralized price-determining activities of individual retail shops cannot bring about the internalization of demand externalities; this creates a problem in that the market areas of shopping districts become too small. This study focuses on the price adjustment function that arises from the use of discount point systems in existing shopping districts; it also considers the measures used to realize the socially optimal market structure. In addition, the authors clarify that it is essential that price restriction mechanisms involving member shops in discount point systems work to maintain sustainable price coordination functions in existing shopping districts.
Yoko Konishi, Se-il Mun, Yoshihiko Nishiyama and Ji-eun Sung
This chapter presents a microeconomic model of interregional freight transportation based on careful formulation of cost structure in trucking firms and market equilibrium. It takes into account the feature of transport service as a bundle of multiple characteristics. The authors estimate the parameters of the model using the microdata of interregional freight flows from the 2005 Net Freight Flow Census for Japan. Estimation results show that the determinants of transport cost incorporated in the model have significant effects in a manner consistent with theoretical predictions. The degree of competition also has a substantial effect on freight charge. Significant scale economies with respect to lot size and long-haul economies are shown to exist. The quantitative extent of these effects is also demonstrated.
Kakuya Matsushima and Kiyoshi Kobayashi
The mechanism of residential sorting and its effect on the economy are analysed by building a theoretical model that explicitly treats the emotional part of utility for choosing a specific travel mode. The authors also verify the residential sorting effects by using person trip survey data in Japan. The chapter concludes with a discussion of the model’s findings for policy planning. In particular, the authors found implementing soft transport policy measures that affect individuals’ preference for travel mode have to be considered as one of the tools of policy measures in city planning.
Åke E. Andersson and Börje Johansson
This chapter addresses the role of knowledge in regional development. Knowledge is a multidimensional concept that includes private knowledge embodied in an individual’s brain (human capital); technical advances embodied in computers, machinery and other production equipment; knowledge embodied in production recipes, patenting documents or computer software; and public knowledge in scientific journals. For the individual firm, innovation is driven by the conjunction of its knowledge arising from internal research and external knowledge. The dynamic interactions of these different representations of knowledge is a complicated process. The chapter presents a conceptual framework for identifying interaction processes in the global system of knowledge creation and exploitation, as well as formal models of economic theory, to draw conclusions about characteristics of the knowledge economy including the emergence of some places as knowledge centres and the decline of other research-poor peripheral regions.
Thomas Laitila, Marie Lundgren and Michael Olsson
This chapter studies individual commuting behaviour by considering the spatial variation of the economic milieu. The model employed relates the relative commuting probabilities to the relative labour demand and relative worker competition. The authors work with aggregated data separated into categories defined by gender and education level. The dependent variables in the model are heteroskedastic and dependent. Moreover, the variables are logarithmic ratios, which is an additional statistical challenge. In order to estimate the model in this situation, the authors use Feasible generalized least squares. The model is estimated using the whole data set, but also for the categories. Overall, the estimated model fits the data well. An individual loses utility when commuting from the home municipality. The loss is greater if the commute is to another region. The individual utility is positively related to labour demand and negatively related to worker competition. This is the case for all categories, with one minor exception.