Course Name : Transportation Economics

Degree:  Undergraduate

Code

Year/Semester

Local Credits

ECTS Credits

Course Implementation, Hours/Week

Course

Tutorial

Laboratory

ULT  221

2 (SPRING)

2

3

2

Department

IIBF

Instructors

Dr. TANSEL ERKMEN

Contact Information

terkmen@pirireis.edu.tr

Office Hours

Tuesday 1000-1200

Web page

www.pirireis.edu.tr

Course Type

 Compulsory

Course Language

English

Course Prerequisites

  -

Course Category by Content, %

Basic Sciences

Engineering Science

Transportation

Humanities

30

40

30

Course Description

Transport is a major industry in its own right but also supplies important inputs into other sectors. It also influences land-use patterns and the pace of economic development. This course provides a basis for understanding the economics of the transport system and, in particular, how transportation relates to urban, regional, and national development. Introduction to transportation analysis, with an emphasis on firms and their operating environment. Pricing and output decisions and cost and profit determination in competitive, imperfectly competitive, and monopolistic markets.  It begins with an introduction to the methodology of economics and continues with an analysis of demand and supply. We also analyse the role of financial markets as a source of funds for firms, and as a link between goods and firms. The course does not focus on any particular mode of transportation, but rather treats transport generically, although for illustrative purposes a number of case studies will look at specific modal examples. In this sense the course is very much one grounded in applied economics rather than a course in economics theory. Transport economics makes use of a range of economic ideas and concepts to examine the nature of markets in which transport services are provided.

Course Objectives

1, Introduce basic transportation and economics concepts.

2. Improve critical thinking and problem solving skills in economics..

3. To give students a familiarity with main features of the national and international economy in general and transportation economy in particular, as well as the economic issues of the day.

4. Transportation economics is not a collection of facts to be written down and memorised.

Course Learning Outcomes

1. Students should be equipped with some tools and methods of economic analysis that will serve as the basis for a more advanced course of study in transportation theory.
2. The first part of the initial class will be devoted to introducing the course. It will briefly go over the way economists look at transportation problems,
3. The links between transportation economics and other areas of study,
4. The institutions that influence the ways in which economic concepts are applied to transportation issues.
5. Understand and apply supply and demand analysis to relevant economic issues
6. The demand for transportation services is derived from the demand for final goods, services and personal activities,
7. Transportation also influences where these firms locate their activities and where individuals live.
8. It is important to understand the interconnections between these effects to develop an analysis of transport markets.

Instructional Methods and Techniques

Lecture, discussion and problem sessions

Tutorial Place

Co-term Condition

Textbook

Principles of Economics, 6th Edition

Other References

Homework & Projects

Laboratory Work

Computer Use

Other Activities

Assessment Criteria

Activities

Quantity

Effects on Grading, %

Attendance

Midterm

1

30

Quiz

Homework

1

20

Term Paper/Project

Laboratory Work

Practices

Tutorial

Seminar

Presentation

Field Study

Final Exam

1

50

TOTAL

100%

Effects of Midterm on Grading, %

50%

Effects of Final on Grading, %

50%

TOTAL

100%

Week

Topics

Course Outcomes

Week 1, 2

The demand for transport is a derived one and varies over time (peaks). Understanding the nature of the factors influencing transport demand is important both for the private actors supplying transport services and for government bodies that have responsibility for regulation and control.

I

Week 3

Key concepts are both the direct and cross price elasticities of demand and factors that cause shifts in the demand function. The importance of quality considerations is of importance and the concept of generalized costs has a central role to place in demand analysis.

I-II

Week 4, 5

Transport supply involves considerable financial costs. The supply function for transportation services is often complex involving economies of scale, scope and density.

II-III

Week 6, 7

In particular the notion of fixed costs poses problems when examining scheduled services, and the idea of marginal cost is challenging when there are physical indivisibilities in the supply function.

II-III

Week 8

The complexities of the demand and cost functions for transport services make pricing complex.

II-III

Week 9

MID TERM

Week 10

The importance of peak-load pricing and differential- pricing (including two-part tariffs) have long been theoretically recognized as important and the introduction of new information systems and charging technologies has seen important moves at implementation.

II-III

Week 11

Most forms of public transportation involve elements of fixed costs that are difficult to recover in competitive markets.

I-II-III

Week 12

Transport has always been regulated to contain some of the worst implications of external effects such as congestion and environmental intrusion.

II-IV

Week 13

Transport infrastructure is generally expensive, long-lived, environmentally intrusive and inflexible

III

Week 14

Private sector infrastructure is appraised using conventional financial criteria but public sector infrastructure involves the use of techniques that fall under the generic title of ‘cost- benefit analysis’. Transport has long been one of the most regulated of sectors because of its strategic importance, the potential for market failures and the potential for using transport to meet wider social and political objectives.

II-III-IV