A radical reappraisal of transport and land market basics

Abstract

The current foundation narrative of land transport service established in 1960s, focused on projections of existing demand, equilibrium models, and projects with feasibility based on the value of time savings exceeding costs. This works reasonably for inter-urban infrastructure. However in urban areas, communities observe that the benefits of capacity improvements are short lived while wider community costs are substantial and long lasting. Exceptions to the 1960’s narrative exist places like Amsterdam. Distilling the principles underlying these exceptions produces a new framework, with a foundation narrative that focuses on broad objectives to develop liveable, resilient and sustainable cities. The paper analyses the systems framework in which urban economic action takes place including insights of behavioural economics in the cost functions used. It then analyses the institutional arrangements that govern urban economic decisions. Then follows analysis of the product markets that constitute urban transport service, namely land, facilities, vehicles, and trips. Then models useful for investment analysis for each product are analysed. Finally the paper summarizes what transport service decision making would look like applying these changes and how this could be expressed in a new foundation narrative for our perspective on urban land transport service.