Transport Economics

Aim

After the course is completed, the student shall:

Goal 1: have knowledge of and be able to use the most common concepts and models for financial decision-making based on given information and targeting various financial goals within the consumer theory.

Goal 2: have knowledge of and be able to use the most common concepts and models for financial decision-making based on given information and targeting various financial goals within the producer theory.

Goal 3: have knowledge of and be able to use the most common concepts and models for financial decision-making based on given information and targeting various financial goals within the market theory.

Goal 4: have knowledge of and be able to use the most common concepts and methods for how the cost structure of different types of transport affects the optimal design of the transport system. In addition, the student shall be able to explain the principles of how socio-economically based investment assessment is used and apply these in practical cost-net analysis in passenger transport systems.

Content

The course introduces differences between corporate and socio-economic approach and is based on an economically sustainable perspective. The course covers a number of partially overlapping areas:

Basic micro economicsHere we study how resource allocation through price formation works in a market economy under market forms complete competition and monopoly.

Mathematical model building: Formulation and solution of mathematical models with economic application, optimization with living conditions

Demand: Consumer problems, demand and supply

Producer theory: Theories of production function, iso-cost curves, expansion curves and price discrimination.

• Market theory: The theory of complete competition, monopoly, and various forms of oligopoly solutions.

Investment in transport infrastructureAn efficient transport system requires a well-functioning infrastructure. The course deals with principles for investment assessment through cost-benefit analysis, which aims at efficient use of society's resources by identifying socially economically viable projects and prioritizing between them.

PricingTransport costs, including user costs in the form of time and environmental costs, affect the actions and strategy choices of individuals and companies. Pricing is an essential part of an efficient transport system. Here, general pricing principles and applications for different types of traffic are examined under different conditions.

Planning and regulation of transport systemsThe course will also deal with some planning of transport systems and the effect of different types of regulations. For example, socio-economically efficient design of public transport systems in terms of line laying, traffic supply and pricing will be discussed.