God for having the “Kadayawan Festival” that gave me opportunity of having a day break from my work, provided me time of reading, reviewing, and presenting my point of view with regards to the contents and discussions being presented in the article.
The authors of “The Economic Efficiency Case for Road User Charging” have presented and explained the basic principle and nature of efficient charging for road users' Marginal External
Cost. On why there is a need to charge road users, the factors considered in setting Marginal Social
Cost price for charging and …show more content…
The combination of these costs will be referred as users' Marginal Social Costs. Road users should be aware of what these costs are for they need to consider these every time they choose whether to travel, to adapt destination, mode of transport, route and time of travel.
In setting the price for Marginal Social Cost, I agreed with what the authors have pointed out that the two main constraints are the technical and economic aspects. Technical not have implemented Marginal Social Cost pricing for transport services. Motorist is faced with charging mechanisms through Vehicle Excise Duty and Fuel Duty for road vehicles. This structure of charges fails to reflect the variation in Marginal Social Cost across the network in terms of congestion and environmental costs as well as difference in wear and tear caused by heavy axle-load vehicles. In Great Britain, as mentioned by the authors, the impact of current charging regime reflects the change in car ownership which has grown from around 2 million cars for a population of less than 49 million in the 1950s, to today’s 24.5 million cars for a population of around 58 …show more content…
As what the authors have mentioned, equity is as important as efficiency specially in determining how the tariff should be set for public utility type goods. Equity is a multi-dimensional concept. How to set pricing of Marginal Social Cost for each dimensional concept? Let say, equity between road users of different classes. For me, setting of price through bracketing of classes with the corresponding price setting of charge per class will work. Equity between heavy and light users of the system, can be addressed by price charging that should be based in vehicle's type and gross weight. For equity between car and public transport users, charging should be based on loading capacity. In pricing elsewhere in economy, the practical implication is that, where there are divergences between price and Marginal Social Cost in related markets, would lead to cases for divergences in the market in question. I would like to take the concern presented about transport interaction with land use, where there is an implicit assumption that land is either correctly priced in social terms, or is managed by the planners as if it is. For me, price setting for Marginal Social