External costs of intercity truck freight transportation

9819 WordsDec 2, 201340 Pages
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…show more content…
Signi®cant external costs arise from transportation, although accurate estimates of their magnitudes have been dicult to obtain. In this article we assemble best available estimates of external costs due to freight truck operations between cities (i.e. in rural areas). To place these costs in a useful context, we compare them with corresponding private costs, which are the market costs directly faced by freight carriers. This article does not address the issue of external bene®ts arising through the transportation of freight. Most transportation economists doubt the existence of signi®cant external bene®ts from the provision of transportation services (e.g. Rothengatter, 1994; Verhoef, 1994, p. 278). Markets exist for these services, such that cost savings due to economies of scale or density may be retained by carriers, passed on to shippers, or ultimately passed on to ®nal consumers of the goods that are shipped. As Greene and Jones (1997, p. 9) observe, some economists believe that external bene®ts can arise from improvements to transportation systems (see, for example, Willeke, 1994). An improvement may reduce the costs of ®rms ' operations, thus contributing to increased competitiveness and more output. If scale economies exist, the unit cost of production may drop. Depending on the market structure, bene®ciaries of this cost reduction may be the producing ®rm or its

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