MIDLANDS STATE UNIVERSITY
FACULTY OF BUSINESS SCIENCES
DEPARTMENT OF LOGISTICS & SUPPLY CHAIN MANAGEMENT
MODULE: TRANSPORT ECONOMICS (LSC233)
Lecturer(s): Ms. P. Makoni Cell 0775140076 E- Mail: [email protected]
: Ms N. Mukutiri Cell 0772589020 E- mail :
[email protected] :Mrs. B. Marufu Cell: 0776640806 E-mail:
[email protected]1.1 Course Description
This module provides a critical awareness of how economics can be used to overcome current
problems in the transport sector, such as congestion, inadequate service (in terms of both
quantity and quality) and high prices. It provides a systematic and comprehensive
understanding of the key concept in transport economics and the graphical and numerical
analytical techniques used by transport economists. The course aims at offering a clear
understanding of the basics of transport economics. Fundamentals in Transport Economics to
include financial and economic implications and types of transport costs, financial
implications of transport regulations, productivity standards, distribution planning, security in
transport and warehousing activities, reverse logistics, distribution requirements planning,
cost versus service tradeoffs in investing for transport, outsourcing transport and transport
broking.
1.2 Learning Outcomes
Upon completion of this module the learners should be able to:
Understand the different concepts, and principles of transport economics for effective
decision making
Analyze the demand and supply of transport, both freight and passengers.
Understand the alternative transportation models, in light of capacity, effectiveness,
frequency, environment and financing.
To evaluate and apply appropriate analytic techniques and methods in transport
utility skills.
Take decisions based on theory and the understanding of the field of transportation
economics.
Apply the relevant tools and models within transport for effective decision making
and to be able to internalize the underlying problems related to transport from an
economy perspective.
1.3 Approaches
Lectures, independent study, discussions, group work and brief student presentations.
1.4 Assessment
It is recommended that students complete all assignments, tasks and tests in order to achieve
the learning outcomes of the course. The total mark will be determined on the following
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basis: 30% is from tests/presentation/ and assignments (continuous assessment), while the
remaining 70% is from the 3 hour final examination.
1.5 Module Content
1. Introduction
Definition of Transport Economics
Objectives of transport operators
Logistics ( Definition targets, Viewpoints, Fields, Management and Key activities)
2. Transport Demand
Types of transport demand (freight and passenger)
Market Demand
Factors affecting demand for transport
Demand for transport
Peak Demand
Travel Demand elasticities
3. Supply of Transport
Types of transport modes
Excess Supply of Transport
Elasticity of Supply
Cost levels and structures in different modes
4. Pricing in Transportation
Pricing Policy
Price Control and the market
Price Discrimination
Product Differentiation
Congestion Pricing
5. Externalities and Transportation
Environmental Pollution
Traffic Congestion
6. Infrastructure Development, Project Finance and Evaluation
Types of Infrastructure Investment
Ownership and Financing Infrastructure
Modes of Financing Transport Infrastructure (Public sector, Public private
partnership)
Project appraisal and evaluation in Transport
-Cost Benefit analysis
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-Cost Revenue Analysis
7. Transport and Economic Development
Transport and Economic activity
Role of transport in economic development
Government incentives and private sector involvement in transportation
-Location criteria
-The company’s view of transport
-Regulation and deregulation
-Government subsidies
1.6 Essential Reading and Resource List
Button, K. J. (2010), Transport Economics, 3rd edition, Cheltenham, UK - Northampton, MA
- USA: Edward Elgar.
Button, K. (2004), ‘The Rationale for Road Pricing: Standard Theory and Latest Advances’,
in Santos, G. (Ed.), Road Pricing: Theory and Evidence, Research in Transportation
Economics, Vol. 9, Oxford: Elsevier, pp. 3-25.
Levinson, D. (2015) Transportation Economics, Wiki Book. Available online at
https://en.wikibooks.org/wiki/Transportation_Economics
Kockelman, K., Chen, D., Larsen, K., and Nichols, B. (2013). The Economics of
Transportation Systems: A reference for Practitioners. The University of Texas. Available
from amazon.com and from http://www.utexas.edu/research/ctr/pdf_reports/0_6628_P1.pdf
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Gomez-Ibenez, J., Tye, W., & Winston, C. editors (1999). Essays in transportation
economics and policy. Washington DC USA: Brookings Institution Press. Available in E-
Book through McGill Library.
1.7 Other Publications
Goodwin, P., Dargay, J. and Hanly, M. (2004), ‘Elasticities of Road Traffic and Fuel
Consumption with respect to Price and Income: A Review’, Transport Reviews, 24(3), pp.
275-292.
Santos, G., Behrendt, H., Maconi, L., Shirvani, T. and A. Teytelboym (2010), ‘Externalities
and economic policies in road transport’, Research in Transportation Economics, 28(1), pp.
2-45.
Small, K. and E. Verhoef (2007), Economics of Urban Transportation, London: Routledge.
[Chapters 2 and 3 and 5.2]
van der Gun, M. and R. Jeuring (2009), ‘Public Transport & Marketing in Small and Medium
Sized Cities’, paper presented at the European Transport Conference.
