Transportation Economics and Project Evaluation(CE73.14)

Course description of the session provided by Dr. Hironori Kato

BASIC INFORMATION

Period: September 3to September 7, 2012

Date and time: Shown below

Room: E220, N250, N240, and W212 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)

September 3 (Mon) 9:00-12:00 @ E220
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 several example of economic analysis in transportation planning are shown.

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.

September 4 (Tue) 9:00-12:00 @ N250
Class 3 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.

Class 4 Consumer's surplus
First, the theoretical method to valuate the benefit stemming from the transportation project is explained. Then, the practical approach to evaluate the benefit is shown. The consumer's surplus is defined and used to valuate the user benefit.

September 5 (Wed) 9:00-12:00 @ E220
Class 5 Cost-benefit Analysis
The basic approach to Cost-benefit analysis is presented. The concepts of net present value, cost-benefit ratio, and economic internal rate of return are shown.

Class 6 Examples of Cost-benefit Analysis
The applications of cost-benefit analysis to the real projects are presented. The examples include the transportation projects in Asian countries.

September 6 (Thu) 13:00-16:00 @ N240
Class 7 Market
First, the competitive market is discussed. The market equilibrium is introduced with the concept of Pareto efficiency. Then, the monopolistic market is discussed. The reason why the transportation market becomes the natural monopoly is shown. Finally, the oligopoly is presented with the simple examples of game theory.

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.

September 7 (Fri) 9:00-12:00 @ W212
Class 9 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.

Class 10 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%
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;

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