AN APPLICATION OF ECONOMIC THEORY TO HIGHWAY FINANCE AND PLANNING

THE USE OF CLASSIC ECONOMIC THEORY IS PROPOSED AS THE BEST GUIDE TO ALLOCATION OF RESOURCES IN PLANNING A TRANSPORTATION SYSTEM. A PRICING POLICY, BASED UPON A COST OCCASIONED CONCEPT, ALLOWS EXPENDITURES FOR ROADS TO BE CONTROLLED BY DEMAND, AS REFLECTED BY REVENUES. CERTAIN CONCLUSIONS FOLLOW FROM SUCH A COST-PRICE-DEMAND RELATIONSHIP. THEY SHOULD HAVE A PRACTICAL BEARING ON THE DETERMINATION OF HIGHWAY DEFICIENCIES, HIGHWAY PLANNING AND PROGRAMMING, METHODS OF ALLOCATING ROAD AND STREET COSTS, AND SELECTION AND ESTABLISHMENT OF MOTOR VEHICLE USER IMPOSTS. SUCH A THEORETICAL APPROACH MUST NECESSARILY BE MODIFIED FOR USE IN PRACTICAL PROBLEMS.