COMPUTATION OF THE INTERNAL COSTS OF TRANSPORT IN THE MODEL. IN: REFORMING TRANSPORT PRICING IN THE EUROPEAN UNION: A MODELING APPROACH

The main aim of the models used in this book is to investigate welfare effects of policies that improve the pricing of passenger and freight transport. The investigation of these welfare effects requires data on the demand, supply, and internal/external costs of transport with which to calibrate the transport models and study the effects of different transport policies. This chapter considers the estimation of the internal costs that are required as input as models. The paper begins by discussing some conceptual issues, followed by an overview of different methods for estimating the various internal cost components. Lastly, analysis methods are reviewed, and conclusions are given.