External costs of intercity truck freight transportation
Transportation Research Part A 33 (1999) 505±526
www.elsevier.com/locate/tra
External costs of intercity truck freight transportation
David J. Forkenbrock *
Public Policy Center, The University of Iowa, Iowa City, IA 52242, USA
Abstract
From a societal perspective, it is desirable for all transportation users to pay their full social (private and external) costs. We estimate four general types of external costs for intercity freight trucking and compare them with the private costs incurred by carriers. Estimated external costs include: accidents (fatalities, injuries, and property damage); emissions (air pollution and greenhouse gases); noise; and unrecovered costs associated with the provision, operation, and maintenance of public facilities. The analysis reveals that external costs are equal to 13.2% of private costs and user fees would need to be increased about threefold to internalize these external costs. # 1999 Elsevier Science Ltd. All rights reserved.
Keywords: Pricing; External costs; Trucking; Transportation economics; Road ®nance
1. Introduction
Comparatively low-cost freight transportation has been an important element in the growth of the US economy. Goods can be transported between most points in the country quite cheaply and eciently. To varying degrees, however, the freight transportation services we consume generate costs that are borne by others. Such costs are commonly referred to as external costs.
From a societal perspective, it is desirable for all transportation services to pay their full social
(private and external) costs. If the full social cost were re¯ected in the prices shippers pay, transportation users could choose the amount of each form of service to consume on the basis of the true cost of this service to society. By ``internalizing ' ' external costs, policy makers would eectively create a market through which transportation users could weigh the bene®ts of consuming a particular transportation
www.elsevier.com/locate/tra
External costs of intercity truck freight transportation
David J. Forkenbrock *
Public Policy Center, The University of Iowa, Iowa City, IA 52242, USA
Abstract
From a societal perspective, it is desirable for all transportation users to pay their full social (private and external) costs. We estimate four general types of external costs for intercity freight trucking and compare them with the private costs incurred by carriers. Estimated external costs include: accidents (fatalities, injuries, and property damage); emissions (air pollution and greenhouse gases); noise; and unrecovered costs associated with the provision, operation, and maintenance of public facilities. The analysis reveals that external costs are equal to 13.2% of private costs and user fees would need to be increased about threefold to internalize these external costs. # 1999 Elsevier Science Ltd. All rights reserved.
Keywords: Pricing; External costs; Trucking; Transportation economics; Road ®nance
1. Introduction
Comparatively low-cost freight transportation has been an important element in the growth of the US economy. Goods can be transported between most points in the country quite cheaply and eciently. To varying degrees, however, the freight transportation services we consume generate costs that are borne by others. Such costs are commonly referred to as external costs.
From a societal perspective, it is desirable for all transportation services to pay their full social
(private and external) costs. If the full social cost were re¯ected in the prices shippers pay, transportation users could choose the amount of each form of service to consume on the basis of the true cost of this service to society. By ``internalizing ' ' external costs, policy makers would eectively create a market through which transportation users could weigh the bene®ts of consuming a particular transportation
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