How large is the gap between present and efficient transport prices in Europe?

S. Proost, K. van Dender, C. Courcelle, B. de Borger, J. Peirson, D. Sharp, R. Vickerman, E. Gibbons, M. O'Mahony, Q. Heany, J.C.J.M. van den Bergh, E.T. Verhoef

Research output: Contribution to JournalArticleAcademicpeer-review


In this paper, we analyse the gap between present transport prices and efficient transport prices. Efficient transport prices are those prices that maximise economic welfare, including external costs (congestion, air pollution, accidents). The methodology is applied to six urban and interregional case studies using one common optimal pricing model. The case studies cover passenger as well as freight transport and cover all modes. We find that prices need to be raised most for peak urban passenger car transport and to a lesser extent for interregional road transport. Optimal pricing results for public transport are more mixed. We show that current external costs on congested roads are a bad guide for optimal taxes and tolls: the optimal toll that takes into account the reaction of demand is often less than one third of the present marginal external costs. © 2002 Published by Elsevier Science Ltd.
Original languageEnglish
Pages (from-to)41-57
Number of pages16
JournalTransport Policy
Publication statusPublished - 2002

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