Welfare Economic Principles of (Urban) Rail Network Pricing

2016 ◽  
pp. 161-171
Author(s):  
Jörg Schimmelpfennig
Keyword(s):  
Consumer Surplus ◽  
Welfare Economic ◽  
Railway Network ◽  
Rail Network ◽  
Marginal Costs ◽  
Long Run ◽  
Pricing Rules ◽  
Urban Rail ◽  
Short Run ◽  
Definition Of

The purpose of this chapter is to rectify the at best unprofessional intermingling of objectives and constraints and present a proper theory of first-best and second-best pricing in urban rail networks. First, in view of the flaws of both Dupuit's – though nevertheless ingenious idea of – consumer surplus as well its cannibalized version found in most of today's economics textbooks, a proper definition of economic welfare resting on Hicks'sian variations instead is provided. It is used to derive efficient pricing rules that are subsequently applied to specific questions arising from running an urban railway network such as overcrowding, short-run versus long-run capacity or competing modes of transport like the private motor car. At the same time, another look is taken at economic costs, and in particular economic marginal costs, differing from commercial or accounting costs. Among other things, it is shown that even with commercial marginal costs being constant first-best pricing might not necessarily be incompatible with a zero-profit budget.

Welfare Economic Principles of (Urban) Rail Network Pricing

2020 ◽  
pp. 387-397
Author(s):  
Jörg Schimmelpfennig
Keyword(s):  
Consumer Surplus ◽  
Welfare Economic ◽  
Railway Network ◽  
Rail Network ◽  
Marginal Costs ◽  
Long Run ◽  
Pricing Rules ◽  
Urban Rail ◽  
Short Run ◽  
Definition Of

The purpose of this chapter is to rectify the at best unprofessional intermingling of objectives and constraints and present a proper theory of first-best and second-best pricing in urban rail networks. First, in view of the flaws of both Dupuit's – though nevertheless ingenious idea of – consumer surplus as well its cannibalized version found in most of today's economics textbooks, a proper definition of economic welfare resting on Hicks'sian variations instead is provided. It is used to derive efficient pricing rules that are subsequently applied to specific questions arising from running an urban railway network such as overcrowding, short-run versus long-run capacity or competing modes of transport like the private motor car. At the same time, another look is taken at economic costs, and in particular economic marginal costs, differing from commercial or accounting costs. Among other things, it is shown that even with commercial marginal costs being constant first-best pricing might not necessarily be incompatible with a zero-profit budget.

A Model of Queue Scalping

2021 ◽  
Author(s):  
Luyi Yang ◽  
Zhongbin Wang ◽  
Shiliang Cui
Keyword(s):  
Social Welfare ◽  
Service Provider ◽  
Operations Management ◽  
Consumer Surplus ◽  
System Throughput ◽  
Theoretic Model ◽  
Material Interest ◽  
Long Run ◽  
Short Run ◽  
Primary Service

Recent years have witnessed the rise of queue scalping in congestion-prone service systems. A queue scalper has no material interest in the primary service but proactively enters the queue in hopes of selling his spot later. This paper develops a queueing-game-theoretic model of queue scalping and generates the following insights. First, we find that queues with either a very small or very large demand volume may be immune to scalping, whereas queues with a nonextreme demand volume may attract the most scalpers. Second, in the short run, when capacity is fixed, the presence of queue scalping often increases social welfare and can increase or reduce system throughput, but it tends to reduce consumer surplus. Third, in the long run, the presence of queue scalping motivates a welfare-maximizing service provider to adjust capacity using a “pull-to-center” rule, increasing (respectively, reducing) capacity if the original capacity level is low (respectively, high). When the service provider responds by expanding capacity, the presence of queue scalping can increase social welfare, system throughput, and even consumer surplus in the long run, reversing its short-run detrimental effect on customers. Despite these potential benefits, such capacity expansion does little to mitigate scalping and may only generate more scalpers in the queue. Finally, we compare and contrast queue scalping with other common mechanisms in practice—namely, (centralized) pay-for-priority, line sitting, and callbacks. This paper was accepted by Victor Martínez de Albéniz, operations management.

Hotel and Dependency Costs of Residents in Old People's Homes

1978 ◽  
Vol 7 (1) ◽  
pp. 1-22 ◽  
Author(s):  
Bleddyn Davies ◽  
Martin R. J. Knapp
Keyword(s):  
Residential Care ◽  
Capital Investment ◽  
Self Care ◽  
Marginal Costs ◽  
Unit Costs ◽  
Long Run ◽  
Average Unit ◽  
Short Run ◽  
The Cost ◽  
Old People's Homes

AbstractA comparison of costs to the organization of alternative forms of care requires estimates for similar types of client. The degree of dependency is the main characteristic in which comparability is necessary with regard to services for the aged. This paper presents estimates of the costs incurred in providing residential care for clients of four degrees of incapacity for self-care – the capacity implicit in Bevan's residential hotel model of the old people's home, and three progressively more severe states of dependency. The estimates are for two cost concepts – average (unit) costs and marginal costs (the cost of caring for an additional person). The paper also estimates both long-run costs (costs that it is appropriate to take into account in decisions in which capital investment in new plant is being considered), and short-run costs (costs that it is appropriate to consider when the issue is the allocation of existing capacity between client groups). It also examines the consequences of the size of the home with regard to costs. Inter alia the paper shows:(a) that the size of home beyond which costs do not fall with scale provides for as many as fifty places (equivalent to an average daily census of forty-six residents); and(b) that, although the dependency components of costs are much smaller than the hotel components, dependency costs are large enough for it to be important to base comparisons of alternative forms of care on estimates of costs for clients which are comparable with respect to dependency.

scholarly journals Immigrants and the Making of America

2019 ◽  
Vol 87 (1) ◽  
pp. 382-419 ◽  
Author(s):  
Sandra Sequeira ◽  
Nathan Nunn ◽  
Nancy Qian
Keyword(s):  
Educational Attainment ◽  
Agricultural Productivity ◽  
Economic Prosperity ◽  
Railway Network ◽  
Mass Migration ◽  
Long Run ◽  
Short Run ◽  
Gradual Expansion ◽  
European Immigration ◽  
The U.S

Abstract We study the effects of European immigration to the U.S. during the Age of Mass Migration (1850–1920) on economic prosperity. Exploiting cross-county variation in immigration that arises from the interaction of fluctuations in aggregate immigrant flows and of the gradual expansion of the railway network, we find that counties with more historical immigration have higher income, less poverty, less unemployment, higher rates of urbanization, and greater educational attainment today. The long-run effects seem to capture the persistence of short-run benefits, including greater industrialization, increased agricultural productivity, and more innovation.

scholarly journals Inflation and Financial Sector Performance: The Case of Nigeria

2014 ◽  
Vol 7 (1) ◽  
pp. 55-69 ◽  
Author(s):  
R. Santos Alimi
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Financial Sector ◽  
Macroeconomic Performance ◽  
Financial Sector Development ◽  
Long Run ◽  
Negative Effect ◽  
Short Run ◽  
Sector Performance ◽  
Definition Of

Abstract The paper examines the long run and short run relationships between inflation and the financial sector development in Nigeria over the period between 1970 and 2012. Three variables, namely; broad definition of money as ratio of GDP, quasi money as share of GDP and credit to private sector as share of GDP, were used to proxy financial sector development. Our findings suggest that inflation presented deleterious effects on financial development over the study period. The main implication of the results is that poor macroeconomic performance has deleterious effects to financial development - a variable that is important for affecting economic growth and income inequality. Moreover, we observed a negative effect of the measures of financial development on growth, suggesting that impact of inflation on the economic growth passes through financial sector. Therefore, low and stable prices, is a necessary first step to achieving a deeper and more active financial sector that will enhance growth as predicted by Schumpeter.

Class Actions, Compliance and Moral Cost

2011 ◽  
Vol 7 (2) ◽  
Author(s):  
Bruno Deffains ◽  
Dominique Demougin
Keyword(s):  
Consumer Surplus ◽  
Class Action ◽  
Competitive Environment ◽  
Care Level ◽  
Class Actions ◽  
Long Run ◽  
Short Run ◽  
Moral Cost ◽  
Efficient Care ◽  
Action Procedure

We study the effects of introducing class action lawsuits into a competitive environment where some firms have an intrinsic motivation to implement efficient care. The standard aggregation argument in favor of class action holds that there will be increasing efficiency due to lower litigation costs. In the short run, intrinsically motivated firms benefit from the introduction of a class action procedure. In the long run, new intrinsically motivated entrants are attracted into the market, thereby increasing consumer surplus. Overall, the average care level increases.

scholarly journals Welfare Effects of Water Pricing in Germany

2015 ◽  
Vol 01 (04) ◽  
pp. 1550019 ◽  
Author(s):  
Christopher Müller
Keyword(s):  
Consumer Surplus ◽  
Welfare Economic ◽  
Welfare Effects ◽  
Price Structure ◽  
Marginal Costs ◽  
Lump Sum ◽  
Marginal Cost Pricing ◽  
The Mean ◽  
The Cost ◽  
Marginal Price

The observed two-part tariff price structure (consisting of a lump-sum price and linear marginal price) for drinking water in Germany does not reflect the cost structure reported in the literature. Recovering marginal costs from a sample of 251 German counties, we see that there are positive price-cost margins, while lump-sum prices are too low. A price structure readjustment along welfare economic principles (marginal cost pricing, lump-sum price ensures cost-recovery) would increase the mean consumer surplus by 0.037% of the local GDP or €[Formula: see text]2.129 million per county, assuming a share of 15% variable costs in total costs.

scholarly journals Microeconomic aspects of government subsidies in the agricultural market

2012 ◽  
Vol 58 (No. 11) ◽  
pp. 542-548 ◽  
Author(s):  
L. Severová ◽  
J. Chromý ◽  
B. Sekerka ◽  
A. Soukup
Keyword(s):  
Large Scale ◽  
Agricultural Products ◽  
Perfect Competition ◽  
Agricultural Product ◽  
Actual Problem ◽  
Marginal Costs ◽  
Long Run ◽  
Price Subsidy ◽  
Short Run ◽  
The Government

It is known from the Czech practice that a very actual problem of economic policy is created by the subsidies on the prices of agricultural products. A price subsidy of agricultural product causes the price to be kept above its equilibrium level. We will use the microeconomic knowledge about the behaviour of average and marginal costs curves in the short-run and long-run. We assume two agricultural firms in a perfect competition market. The agricultural large-scale company reaches a normal profit, but the small family firm has higher costs, therefore it runs at a loss. Using the subsidy can ensure that the prices of agricultural products are set at a level, at which the farmers have appropriate incomes. However, a loss of efficiency can occur because of the subsidy as the surplus, which is purchased by the government, and actually stays unused.  

scholarly journals J M Keynes on the Definition of Uncertainty: Why Uncertainty must come in Degrees and has nothing to do with Ergodicity or Non Ergodicity

2016 ◽  
Vol 3 (1) ◽  
pp. 1
Author(s):  
Michael Emmett Brady
Keyword(s):  
A Priori ◽  
Quarterly Journal ◽  
Decision Makers ◽  
Convergence Properties ◽  
Academic Field ◽  
Long Run ◽  
Binary Approach ◽  
Short Run ◽  
Definition Of ◽  
Economic Journal

<p>Keynes’s definition of uncertainty is directly based on his weight of the argument (evidence) relation, analyzed in chapters 6 and 26 of the A Treatise on Probability (1921), page 148,as well as the footnote on page 148 ,of the General Theory (1936) ,and multiple pages of his February, 1937 Quarterly Journal of Economics article. There is no discussion of the definition of Uncertainty in his exchanges with Jan Tinbergen in 1939-40 in the Economic Journal.</p><p><br />Paul Davidson and his Post Keynesian-Institutionalist supporters base their Ergodic-Non Ergodic approach to the definitions of uncertainty and risk on the inductive fallacy of Conditional A priorism (Long Runism).The claim , made by Paul Davidson and his Post Keynesian-Institutionalist supporters for over 30 years, that decision makers are able to identify the ergodicity or non ergodicity of long run stochastic sequences or series of events or outcomes in the short run ,based on Davidson’s claim that decision makers are able to know or learn of the convergence properties of such series or sequences, which can only be known “in the long run “(infinity), by examining sub series or sub sequences ,is patently false and not accepted by any scholar in any other academic field .</p><p><br />Davidson bases his binary approach to uncertainty, which rules out any concept of different degrees to knowledge (certainty) and unknowledge (uncertainty), on both metaphysical speculations and/or a priori claims to knowledge. There can be no such thing as probable knowledge under this binary approach.</p>

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