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Title: Political economy of transport investment, pricing and the use of resources
Author: Nellthorp, John
Awarding Body: University of Leeds
Current Institution: University of Leeds
Date of Award: 2011
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This thesis proposes that the theory underlying cost-benefit analysis (CBA) be strengthened in three respects - its treatment of social choice: quality of life and differentiated pricing. The summation across individuals in the Kaldor-Hicks test is argued to be a key weakness of CBA. Transport policymaking is reinterpreted as the resolution of co-ordination problems, and a set of three social choice criteria are developed based on the principles underpinning a mixed economy and democratic political system. These criteria include financial sustainability and consent, as well as a mean wellbeing-maximisation criterion which is close to the conventional NPV -maximisation criterion in CBA. A transport-related quality of life function is constructed, including a wide range of influences - e.g. inequality aversion and the built environment. The possibility of serious harm is recognised, and defined provisionally but quantitatively on the quality of life scale. The function is applied in an illustrative assessment of urban transport policy options. Demand-based price differentiation, sometimes regarded negatively as price discrimination, is defined and circumstances under which it is legal (a social choice) are explored. An approach is set out to assess price differentiation as a policy tool, within the theoretical framework. Application of the revised theory is found to be feasible and to change the ranking of some policy options compared with CBA. Road pricing is found to raise a consent issue, although the analysis suggests how the policy might be returned to overcome this. A metro investment, although expensive, is found to satisfy the criteria with careful use of mitigation and compensation. Differentiated pricing is found to be compatible with the criteria in an urban example, however in a non-urban example the level of prices and ‘unequal treatment' versus other localities are found to raise consent issues, which could have changed the recommendations, if included in the ex ante appraisal.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available