TRANSPORT PROBLEMS: THE ECONOMIC DIAGNOSIS. IN: REFORMING TRANSPORT PRICING IN THE EUROPEAN UNION: A MODELING APPROACH

This chapter provides a brief and fairly non-technical overview of the economic approach to analysis of transport externalities that underlies much of the applied work contained in this volume. Present road traffic as a market equilibrium with externalities is first given, followed by a better market equilibrium that leads into a discussion of a more effective policy. The relation between different transport markets, and the relation between pricing policy and infrastructure policy, are also discussed. The chapter concludes with a section on other dimensions of the transport problem.