Transportation Economics and Project Evaluation(CE73.14)

Course description of the session provided by Dr. Hironori Kato

BASIC INFORMATION

Period: August 18 to August 25, 2009

Date and time: Shown below

Room: N250, E222, or E220 at Asian Insitute of Technology (AIT)

Lecturer: Dr. Hironori Kato (Department of Civil Engineering, University of Tokyo)

COURSE DESCRIPTION

This session in Transportation Economics and Project Evaluation (CE73.14) covers mainly the microeconomic thoery and pricing theory from the perspectives of transportation research. It deals both theories and examples for various kinds of transportation modes. They are important for transportation practitioners and urban planners. Many of the topics introduced in the session will be presented at the intermediate level. To have the knowledge and/or understandings about the basic microeconomic theory is highly recommended.

SCHEDULE (planned)

August 18 (Tue) 13.00-14.30 at Room N250
Class 1 Introduction
The economic approach to transportation planning and policy is introduced. They include the role of economic theory in transportation analysis and their limitations. Then, the basic mathematics used in consumer’s and firm’s theories will be presented.

August 19 (Wed) 13.00-14.30 at Room N250
Class 2 Consumer theory and travel demand model
The basic theory of travel demand analysis is presented in the context of microeconomic theory. The utility-based model is formulated and is extended to the time allocation model. Then, the travel demand models are derived from the microeconomic model.

August 19 (Wed) 14.30-16.00 at Room N250
Class 3 Consumer’s surplus (1)
The theoretical method to valuate the benefit stemming from the transportation project is explained. They include the concepts of Equivalent Variation (EV) and Compensated Variation (CV).

August 20 (Thu) 8.30-10.00 at Room E222
Class 4 Consumer’s surplus (2)
The practical approach to evaluate the benefit is shown. The consumer’s surplus is defined and used to valuate the user benefit. Then, some examples of consumer-surplus evaluation will be presented.

August 20 (Thu) 16.00-17.30 at Room E222
Class 5 Firm’s behavior
First, the technology is described in the context of microeconomic theory. Then, the profit maximization of firm is formulated. The concepts of profit function and cost function are also introduced.

August 21 (Fri) 9.00-10.30 at Room E220
Class 6 Market (1)
The competitive market is discussed. The market equilibrium is introduced with the concept of Pareto efficiency.

August 21 (Fri) 10.30-12.00 at Room E220
Class 7 Market (2)
The monopolistic market is discussed. The reason why the transportation market becomes the natural monopoly is shown.

August 24 (Mon) 13.00-14.30 at Room N250
Class 8 Public goods
First, the public goods is defined. The characteristics of transportation service as the public goods are shown. Then, the conditions of efficient provision of public goods are derived.

August 25 (Tue) 13.00-14.30 at Room N250
Class 7 Pricing theory (1)
The basic concept of pricing theory is shown. The marginal-cost pricing and the average-cost pricing are introduced. Next, the pricing regulation in transportation industry is discussed. It covers the introductory idea of Ramsey pricing and other pricing regulations that are used in practice.

August 25 (Tue) 14.30-16.00 at Room N250
Class 8 Pricing theory (2)
The theory of congestion pricing is presented. The examples of pricing scheme in several cities are also shown.

GRADING

Grading will be determined as follows:
Attendance: 30% (Note that you will lose your credit if you miss 3 classes or more)
Final Examination: 70%.

CONTACT

Dr. Hironori Kato

Visiting Associate Professor, Transportation Engineering Field of Study, School of Engineering and Technology, Asian Institute of Technology

Associate Professor, Department of Civil Engineering, School of Engineering, The University of Tokyo

E-mail: kato@civil.t.u-tokyo.ac.jp;

URL: http://www.trip.t.u-tokyo.ac.jp/kato.

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