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How the Mohring effect becomes a valid argument for subsidization of public transport is discussed. Mohring effect refers to appearance of subsidies due to the existence of economies of scale on the time costs of users. In considering this effect, urban public transport operations are subsidized in the first-best case.

Transport cost functions are used to study the advantages of expanding the network. The economies of spatial scope are estimated using transport cost functions, which are applied to airline industry.

The authors compare demand for travel with two models to make a quantitative estimate of travel time savings.

An analytical method for deciding how to compute for the degree of scale economies from estimated transport cost functions is proposed. Transport cost functions include aggregate output and attributes as arguments. The approach shows that the cost elasticity of each aggregate should be weighted by a factor depending on the relation between the aggregate and the output vector. Application to commonly used output indices and attributes shows that weights rank from one to zero.

The zonal origin-destination (OD) marginal costs incurred by a national trucking system in Chile network are analyzed using a flow aggregation function approach. A Generalised Disjoint Aggregation Matrix was derived to estimate the costs which occur in moving an extra unit, with distance, topography, destination, volume level and system congestion as the relevant factors. The study generated zonal marginal costs with no linear relation to distance, and which were estimated at 14 US cents to 50 US cents per ton-kilometer. Volume became a significant factor to costs incurred within short hauls.

Research is presented describing the development of a new technique to measure the social impact of reducing the number of road accidents in a given economic environment.

It is customary to analyze transport industry structure using two indices: (1) economies of density and (2) economies of scale with variable network size. The latter has been defined to analyze the behavior of costs when output and network size expand simultaneously. After reviewing in detail what is intended with the calculation of RTS under this definition, we show analytically that, when the spatial aspects underlying transport production are taken into account, the seemingly reasonable conditions imposed on the aggregate output descriptions and the network variable conceal implicit output expansions that are not uniquely defined: they happen to depend on the specification of variables and on the evaluation point. Furthermore, most of the multiple output expansions analyzed correspond to cases that are hardly instructive. We conclude that this index is inherently ambiguous, hardly contributes to an adequate analysis of transport industry structure, and should be replaced by the calculation of economies of spatial scope (Journal of Economic Literature L91, L11, D40). [ABSTRACT FROM AUTHOR]

From an economic viewpoint, transportation supply has been historically characterized through very aggregated descriptions of the output of a transportation firm. The use of measures like ton-miles or passenger-kilometers was standard practice through the end of the 1970's. Currently, the accepted description of transportation output is in terms of a vector of flows; aggregate measures have empirically been shown to be the source of significant problems in the economic analysis of transportation systems. In particular, the scarce empirical work on multioutput cost functions shows that the scalar volume-distance measure generates biased estimates of both marginal costs and degree of scale economies. In this paper, these biases are analyzed from an econometric viewpoint, using linear cost functions as first order approximations. Biases are expressed as differences of weighted sums, which are then used to show that, under reasonable statistical assumptions, the aggregated model causes a systematic overestimation of the degree of scale economies. This phenomenon is generalized to include a fairly general dependence of marginal costs on flows and distances. [ABSTRACT FROM AUTHOR]