The Charging Principle for the Development and Maintenance of Transport Infrastructure

With the onset of an aging society and low birth rates, coupled with tight financial conditions being experienced by central and local governments, the need to ensure transport services that protect people’s life in rural areas and provide infrastructure that strengthens global competitiveness of large cities has become more vital than before. Moreover, costs concerning maintenance and renewal of transport infrastructure are also expected to be needed (MLIT, 2012). Under such a situation, what kind of charging principle should be introduced in order to ensure revenue sources for maintenance and renewal of transport infrastructure, such as roads and railways? The objectives of this paper are: 1) to clarify definitions of short run marginal cost pricing and short run average cost pricing (charging principles when transport infrastructure capacity is given), 2) to explain how to obtain long run marginal cost pricing assuming a condition that can optimize transport infrastructure capacity to meet transport demand, and 3) to demonstrate the validity of short run marginal cost pricing through a planning process that gradually increases or reduces transport infrastructure capacity.

Graduate School of Commerce and Management, Hitotsubashi University

2012-10

English(eng)

technical report

VoR

19

Working Paper / School of Business Administration, Hitotsubashi University Business School

https://hdl.handle.net/10086/23233