On Tue, 02 Sep 2008 08:57:40 -0400, "Max B. Sawicky" <sawicky at verizon.net>
wrote:
> By orthodox efficiency criteria, the optimal user fee does not
> necessarily suffice to finance capital expenditure. Its main function
> as WS says is to set use levels. Basically the correct toll runs off
> lower-value users (where 'low value users' is partly determined by
> willingness and ability to pay -- income levels).
I recall one economist did some study in this area and concluded that public transit should be free at all but peek time. If you recall, can you remind me who that was?
Also, it should be noted that using "user fees" to finance capital expenditure of transit is misplaced anyway, it is not the rider who is the economic beneficiary of transit, but the land owner who's location rents capture the investment in transit. The "free rider" is not the one riding.
IMO, fees should only be used against congestion, capital financing should come from value capture or land value taxation. Not even a big fan of general taxation as a source of such financing since that amounts to a transfer of wealth from the general public to land owners (as usual).
Cheers.
-- Dmytri Kleiner editing text files since 1981
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