The aim of the annual ITEA School is to provide young researchers a high-quality introduction to academic research on transport economics, including many recent advances in the field. The School’s program consists of a series of lectures and tutorials; all faculty members are among the most prominent researchers in transport economics. The School contains two parts: the first two-and-half days consist of lectures by renowned scholars, whereas the last two-and-half days require students to attend the conference with the possibility to present their own work.
Lecture Ⅰ: The Political Economy of Transport Decisions
This lecture reviews a number of political economy models that try to explain the discrepancy between observed policies and socially ‘optimal’ policies. In other words, why do policy-makers fail to implement the policies that economists consider the best for society. The first part of the lecture focuses on why policy-makers do not implement optimal pricing policies. The second part considers political decisions on infrastructure investment in the transport sector and explains why the political system leads to socially undesirable investments.
Bruno De Borger (1955) is Professor of Economics at the Department of Economics (University of Antwerp, Belgium). His main research interests are in transport economics, public economics and applied microeconomics. Recently, he focused extensively on the economics of pricing and regulation of transport externalities (road pricing, non-price instruments such as speed bumps, low emission zones, etc.). He has widely published in a variety of economics journals including Journal of Public Economics, European Economic Review, Journal of Urban Economics, Transportation Research B and the Economics of Transportation.
The Political Economy of Transport Decisions. This lecture reviews a number of political economy models that try to explain the discrepancy between observed policies and socially ‘optimal’ policies. In other words, why do policy-makers fail to implement the policies that economists consider the best for society. The first part of the lecture focuses on why policy-makers do not implement optimal pricing policies. The second part considers political decisions on infrastructure investment in the transport sector and explains why the political system leads to socially undesirable investments.
Lecture Ⅱ: Second-Best Road Pricing and Investment
Standard economic theory on optimal pricing and investment assumes that perfect instruments are available and that there are no other distortions in the economy except for market failures in transport. When these assumptions are not satisfied, the first-best policy rules derived under these conditions are no longer the best possible choice. Instead, second-best analysis should be adopted to design and evaluate policies in the most efficient way. This lecture sets out the economic principles behind, and mathematical techniques for, such second-best policy analysis.
Erik Verhoef (1966) is Professor of Spatial Economics at the Department of Spatial Economics (VU University Amsterdam). He is also a fellow of the Tinbergen Institute. His research focuses on efficiency and equity aspects of spatial externalities and their economic regulation, in particular in transport, urban and spatial systems. Important research themes include second-best regulation, network- and spatial analysis and methodological development, efficiency aspects versus equity and social acceptability, industrial organization in network markets, valuation and behavioural modelling, and policy evaluation. He has published extensively in a wide variety of economic and transport journals including International Economic Review, Journal of Public Economics, Journal of Urban Economics, and Transportation Research B.
Lecture Ⅲ: The Economics of Airline Network
Brueckner’s lecture, entitled “The Economics of Airline Networks,” analyzes the economics of hub-and-spoke (HS) networks. Formation of these networks is driven by economies of traffic density, or increasing returns to scale on individual route segments. These economies create an incentive to concentrate traffic on relatively few routes in and out of a hub airport, where passengers change planes, rather than connecting all cities with nonstop flights. HS networks raise flight frequencies, and they usually lead to congestion at the hub, suggesting a need for congestion tolls at some airports. In addition, HS networks may lead to a “hub premium” (higher fares in and out of hubs), the source of which has been debated. These networks also underlie the formation of international airline alliances.
Jan K. Brueckner is Distinguised Professor of Economics at the University of California, Irvine. He received an B.A. from UC Berkeley in 1972 and a Ph.D. from Stanford University in 1976, and was a long-timefaculty member at the University of Illinois at Urbana-Champaign before coming to UCI in 2005. He has served as visiting professor at UC Santa Barbara and UC San Diego, and has been a visiting scholar at many foreign universities.
Brueckner has published extensively in the areas of urban economics, public economics, housing finance, and the economics of the airline industry. He served as editor of the Journal of Urban Economics for 16 years and is currently a member of the editorial boards of 8 journals. He has served as a consultant to the World Bank, the US Department of Transportation, many of the major airlines, and other organizations.
Lecture Ⅳ: The Economics of Parking
This lecture discusses the importance of the welfare losses of nonoptimal parking policies and focuses on empirical strategies to estimate these losses. The first part of the lecture focuses on policies regarding cruising for parking and how to measure cruising for parking using administrative data. The second part of the lecture explains how one can estimate the welfare losses of nonoptimal policies for commuter parking.
Jos van Ommeren (1966) is Professor of Urban Economics at the Department of Spatial Economics (VU University Amsterdam). He is also a fellow of the Tinbergen Institute. His main research interests are in the areas of urban economics with a focus on urban transport, public transport, driverless cars and parking. He is also an expert in inland shipping. He has published extensively in a wide variety of economic and transport journals including Review of Economics and Statistics, Economic Journal, Transport Research B and the Economics of Transportation.
Lecture Ⅴ: Urban Public Transportation
In this lecture, we provide an overview of the economics of urban public transportation. The lecture starts with the conceptual building blocks of users and operators resources, and how they are used as inputs to deliver the final output: travel. From a cost minimization perspective a formal cost function is derived and, from the analysis of its structure, salient features of transits systems are identified, particularly increasing returns to scale, something also known as the Mohring effect. From the interaction with a demand function, optimal and second best pricing are analyzed, and the need for subsidies is discussed.
The second part of the lecture interacts transit and private transportation, building on the previous lecture on equilibria and optima. Market equilibrium and how the whole transportation system may be improved are discussed. Pricing policies such as transit subsidies, which decreases transit fares, or congestion pricing, which charges the substitute mode, are analyzed, as well as policiesthat affect not prices but level of service, such as dedicated bus lanes. Discussion on road capacity addition as a possible policy, and the potential for the Downs-Thomson paradox to emerge are analyzed. The efficiency and possible substitutability of all instruments (prices and capacity) are studied.
Leonardo J. Basso is an Associate Professor at the Department of Civil Engineering, Universidad de Chile and Director of the Chilean research center of excellence Complex Engineering Systems Institute (ISCI) . His areas of research are transport economics, with emphasis on both aviation and urban transport; urban economics, with emphasis ond the importance of public transport on urban structure; and industrial and antitrust economics. He is currently the chair of the Scientific Committee of ITEA.
Lecture Ⅵ: Transportation Cost-Benefit Analysis: Valuations and Decision Making
The lecture sets out review the key components of a transport CBA, and how the CBA should be used in the decision-making context of a government, selecting projects under a budget constraint (applying the knapsack problem). The second part of the lecture focuses on the consumer surplus, deriving the rule-of-a-half, and discussing its advantages in applied CBA. I interpret the consumer surplus as an accessibility measure and show that it equals the logsum, under the assumption that the demand function is linear (Small and Rosen, 1981). The third part of the lecture focuses on valuations in the CBA, and the underlying assumptions of the preferences. I derive the value of travel time savings (VTTS), and draw some key lessons from the estimation of the VTTS distribution. The lecture ends with the contentious issue of to what extent the VTTS should be differentiated in applied transport CBA.
Maria Börjesson, Professor in Economics at VTI Swedish Transport Research Institute and permanently affiliated professor at KTH Royal Institute of Technology. External affiliated to the choice modelling centre, ITS Leeds. Research interests include transport cost-benefit analysis and appraisal, transport pricing, the impact of the transport system on employment and GDP, choice experiments and advanced econometrics for valuation of non-market goods such as travel time, reliability and security. She has published extensively in transport journals. Member of the editorial board of Transportation Research B. Best Paper Award at the tri-annual World Conference of Transport Research 2010; The Emerald Outstanding Author Award 2013; Best paper of the year award, Norwegian association of economists 2016.
Lecture Ⅶ: The Value of Travel Time Variability
This lecture discusses the importance of travel time variability and how travel time variability can be incorporated into traffic models and into economic evaluation of transport projects and policies.
Mogens Fosgerau (1965) is Professor of Transportation and Urban Economics at the Department of Economics, University of Copenhagen, Denmark. He is Editor-in-Chief (toghether with Erik Verhoef) of the Economics of Transportation. His contributions to transportation and urban economics concern the value of travel time, travel time variability and scheduling, traffic congestion and urban form, route choice, and the cost-benefit analysis of transport projects. He also has an important interest in discrete choice demand models, which is the topic of his current Advanced Grant from the European Research Council. He has published in all the major journals in transportation and urban economics as well as in general economics, mathematics, physics, and operational research, e.g., International Economic Review, Journal of Public Economics, Journal of Economic Dynamics and Control, Econometric Theory, Mathematica Scandinavica, Fundamenta Mathematicae, PLOS ONE, European Journal of Operational Research, and Journal of the Royal Society. Personal webpage: https://sites.google.com/view/mogens-fosgerau/start
Lecture Ⅷ: Equilibria and Optima
This lecture reviews the theory of traffic congestion. The first part considers the short run in which road capacity is fixed. It begins with static models. Equilibrium traffic flows are derived for user equilibrium (i.e., when there is no intervention). Optimal tolls are then derived that support the system or social optimum. Attention then shifts to dynamic models, and heterogeneous vehicles and drivers. The second part of the lecture considers the long run in which road capacity can be optimized. Conditions are identified such that revenues from congestion tolls pay for the costs of optimally-designed roads.
Robin Lindsey (1955) is a professor at the Sauder School of Business, University of British Columbia in Canada. He is a founding board member and past president of ITEA, an Associate Editor of Transportation Research Part B, and an editorial board member of several other journals. His research interests include traffic congestion, road pricing, financing roads and other transportation infrastructure, public transit and advanced traveler information systems. He has published over 100 journal articles, book chapters and conference proceedings in transportation, economics, and regional science.
Tutorial I & II: Discrete Choice
In this practical tutorial we will help you to estimate discrete choice models and interpret the estimation results. This will be done using data from a stated choice experiment on cycling in Amsterdam. The tutorial will be helpful for those who want to develop practical skills on behavioral modeling.
Paul Koster works as an assistant professor at the Department of Spatial Economics of the Vrije Universiteit Amsterdam and teaches in the bachelor Philosophy, Politics and Economics at the John Stuart Mill College. He is an expert in discrete choice modeling and the connection of behavioral models to normative policy evaluation. In his recent works he develops alternative participatory approaches to estimate the social value of public policies. Furthermore, he is developing new approaches to bring back the 'R' of responsibility into the normative evaluation of public policies.