Subsidy | A Political Economy of Access

We are pleased to make available Chapter 4: Subsidy of A Political Economy of Access. It opens:

A Political Economy of Access: Infrastructure, Networks, Cities, and Institutions by David M. Levinson and David A. King
A Political Economy of Access: Infrastructure, Networks, Cities, and Institutions by David M. Levinson and David A. King

Should government subsidize transport? If government subsidizes transport, should it subsidize producers or consumers? If a government gave money to consumers, they could spend it on what they want, paying for a service, which if it covers operating costs, could lead to more investment. If it gave money directly to producers, they spend it on more supply. Which leads to a better outcome?

 

The Weakest Link: The decline of the surface transportation networks

Recently published:
Xie, Feng and David Levinson (2008) The Weakest Link: A model of the decline of surface transportation networks. Transportation Research part E 44(1) 100-113. [doi]

This study explores the economic mechanisms behind the decline of a surface transportation network, based on the assumption that the decline phase is a spontaneous process driven by decentralized decisions of individual travelers and privatized links. A simulation model is developed with a degeneration process by which the weakest link is removed iteratively from the network. Experiments reveal how the economic efficiency of a network evolves during the degeneration process and suggest an “optimal” degenerated network could be derived during the decline phase in terms of maximizing total social welfare.
Keywords: Decline; Transportation network; Simulation; Welfare; Accessibility