3.trade and travel.ppt

1、2020/8/14,Location theory,1,3.Trade and travel,2020/8/14,Location theory,2,3.1.The demand for transport,Transport is derived, and its worth derives from the access it provides to other goods and services. Demand for transport comes from the consumers desire to maximize his wellbeing, coupled with th

2、e fact that production costs vary between places.,2020/8/14,Location theory,3,3.1.The demand for transport,Transport is of value, because it confers time and place utility on other goods, factors of production and service. Without any trade between two regions the prices will be determined by local

3、supply and demand conditions.,2020/8/14,Location theory,4,3.1.The demand for transport,If there is a price difference between two regions a motive to transport goods from place to place will be produced, so far as the price difference is greater than the transport cost.,2020/8/14,Location theory,5,2

4、020/8/14,Location theory,6,3.1.The demand for transport,Turning supply and demand curves for the two regions back to back, the following figure can be obtained.,2020/8/14,Location theory,7,2020/8/14,Location theory,8,3.1.The demand for transport,Region1 is shifted above that of region 2, an importin

5、g area. In such case even with the transport cost taken into consideration, a price difference persists between the two regions, and trade of the good between the two regions is profitable.,2020/8/14,Location theory,9,3.1.The demand for transport,One would expect trade to persist increasing the pric

6、e in region 1 and lowering the price in region 2, until the price difference just equals the cost of transport.,2020/8/14,Location theory,10,3.1.The demand for transport,The equilibrium price with trade between the two regions will be such that the price of region 1 plus transport cost will equal th

7、e price in region 2.,2020/8/14,Location theory,11,3.1.The demand for transport,The demand for transport generated by trade is given by excess supply or exports of T12 or, equivalently, the excess demand or imports of -T21. Demand for transport can be changed by changing locally determined prices.,20

8、20/8/14,Location theory,12,3.1.The demand for transport,Production cost may be increased by increase of costs of production inputs. This would shift the supply curve inwards, changing the price difference, the level of trade and, thus, the demand for transport.,2020/8/14,Location theory,13,3.1.The d

9、emand for transport,An increase of employment in one region might cause an increase of demand for food and, thereby, the trade between the regions. There is a correlation between the level of economic activities and the level of demand for transport.,2020/8/14,Location theory,14,3.1.The demand for t

10、ransport,Unemployment decreases, real wages increase, demand for consumer goods and thus producer goods and raw materials increase, thus trade increases and with it demand for transport. The quantity of trade can be affected by the cost of transport.,2020/8/14,Location theory,15,3.1.The demand for t

11、ransport,As transport cost decreases, due to investment in improved facilities or increased efficiency, the effective price gap between regions increases and along with it trade and the volume of transport.,2020/8/14,Location theory,16,2020/8/14,Location theory,17,3.1.The demand for transport,As tra

12、nsport cost decreases, the quantity demanded by the other region will increase. So, the market transport services could be incorporated with variable price.,2020/8/14,Location theory,18,3.1.The demand for transport,The equilibrium level of trade is found at the position where the gap between excess

13、supply and demand equals the cost of transport. Where transport costs are zero, the amount of trade will be maximal and given by the intersection of these curves.,2020/8/14,Location theory,19,3.1.The demand for transport,At every price we can read off how much demand exceeds supply or vice versa and

14、 construct the curves shown as XS and XD. If transport charges exceed Cm on the price axis, then no trade will occur and the demand for transport will be zero.,2020/8/14,Location theory,20,2020/8/14,Location theory,21,3.1.The demand for transport,If we draw a supply curve for transport facilities, l

15、ike ST, then a equilibrium price for transport C*, a quantity of transport demanded, or of inter-regional trade T* and prices for the good in the two regions P1* and P2* can be determined simultaneously.,2020/8/14,Location theory,22,3.1.The demand for transport,Shippers respond to the changes of tra

16、nsport cost and the transport cost is composed of three parts. Transport cost=Tr+Tt+Ts where T is the quantity shipped, r is the freight rate, t is in-transit cost, s is the cost of inventory.,2020/8/14,Location theory,23,3.1.The demand for transport,The latter item (the cost of inventory) varies wi

17、th the frequency and reliability of transport There is a trade-off so that the more regular and reliable the means of transport used and the lower the cost of buffer stock, the more the customer is willing to pay for such transport service.,2020/8/14,Location theory,24,3.1.The demand for transport,T

18、he sum of these elements is the value to match against the price difference between the producing site and the market. In making a choice between different means of transport, the shipper must establish his trade-off between the various elements of his total transport costs equation.,2020/8/14,Locat

19、ion theory,25,3.1.The demand for transport,Now lets assume that the in-transit cost and safety stock items be expressed in terms of time. Clearly the faster delivery is, the lower the exposure to damage and the smaller inventory.,2020/8/14,Location theory,26,3.1.The demand for transport,The shipper

20、is involved in a trade-off between a cash price in the freight rate and a time price in the cost of having goods in transit and maintaining stock.,2020/8/14,Location theory,27,3.1.The demand for transport,The decision he makes between a slower, less reliable, cheaper form of transport and a faster,

21、more reliable, high-rate mode, reveals the money he places on speed, reliability and low inventory.,2020/8/14,Location theory,28,3.1.The demand for transport,The ratio of the difference in time taken by each mode to the difference in cash payment between the two yields a price for time.,2020/8/14,Lo

22、cation theory,29,3.1.The demand for transport,In marketing transport services or evaluating possible investments in transport facilities, the investor needs to know not only the sensitivity to demand with respect to the rate charged, but with respect to the speed and reliability of the service.,2020

23、/8/14,Location theory,30,3.1.The demand for transport,For example, time is very important for delivery of perishable goods and for people traveling to work. However for shippers of large quantities in a regular flow, for whom a transport leg is part of the production line, time is not so important.,

24、2020/8/14,Location theory,31,3.1.The demand for transport,What the customer is buying is capacity to carry particular goods between specific places at specific times, not a lump of “transport”.,2020/8/14,Location theory,32,3.1.The demand for transport,Choice-making involves interdependency between t

25、he kind and amount of transport, the location of factories, the input mix to be used in production, product mix to be used in output, and the market to be penetrated.,2020/8/14,Location theory,33,3.1.The demand for transport,Transport demand decisions are made when a plant is located and its product

26、ion process and markets are established. One of the consideration is the minimization of the costs of access to raw materials or factors of production, including labor, and to markets.,2020/8/14,Location theory,34,3.1.The demand for transport,The production batch size and loading facility investment

27、 may lock a factory into a particular transport medium. For the most part, the division of freight between road, rail and water carriers does seem insensitive to small price changes.,2020/8/14,Location theory,35,3.1.The demand for transport,Short-run decisions on the kind and quantity of transport a

28、re closely interwoven with decisions on the time of scales. The quantity of all transport might be desired to evaluate some policy proposals for reducing energy consumption in transport sector.,2020/8/14,Location theory,36,3.1.The demand for transport,For example, the total volume of coal being carr

29、ied is an important datum for those who manufacture coal wagons,2020/8/14,Location theory,37,3.1.The demand for transport,A geographical index on the quantity of a good transported by a particular mode, indicating where it originates or terminates, may be relevant to the planning of terminal facilit

30、ies.,2020/8/14,Location theory,38,3.1.The demand for transport,The origin-destination flow is the most pertinent notion of the quantity of transport. The operation of the means of transport needs to have information about quantities traveling over particular routes so as to manage capacity and sched

31、ule services.,2020/8/14,Location theory,39,3.2.Travel and Social Physics,Given uncertainty about the processes of flows involved, the inclination is to turn from the deterministic to the probabilistic. One can incorporate uncertainty into a theory by representing a chancy process by a suitable proba

32、bility function.,2020/8/14,Location theory,40,3.2.Travel and Social Physics,The gravity model has been used to describe the strength of communication between communities. The potential model is used to explore the advantages of people in various locations from the point view of interacting with othe

33、rs.,2020/8/14,Location theory,41,3.2.Travel and Social Physics,Social phenomena could be analyzed in terms of time and space. The interaction is in directly proportion to the product of the masses of the two, and is in inversely proportion to some function of the distance between them.,2020/8/14,Loc

34、ation theory,42,3.2.Travel and Social Physics,The masses can be expressed in terms of either population or population weighted by some relevant characteristics such as income. Gravity model has been used in traffic and land-use planning, and it has strategic role in the policy-making process.,2020/8

35、/14,Location theory,43,3.3.pricing transport service,Earlier the transport sector price was given by way of balance between supply and demand. But what is the right price, and thus quantity used, for a good or service in terms of meeting the needs of the whole of society.,2020/8/14,Location theory,4

36、4,2020/8/14,Location theory,45,3.3.pricing transport service,Welfare=social benefits-social costs=revenue + consumer surplus-total cost Consumer surplus is the difference between what the shipper would have been willing to pay and what they actually paid.,2020/8/14,Location theory,46,3.3.pricing tra

37、nsport service,The consumer surplus element of S will be larger the lower the price. The lowest price which will ensure costs are covered is one which equals the additional cost resulting from increasing the quantity of transport provided by one unit.,2020/8/14,Location theory,47,3.3.pricing transpo

38、rt service,So the wellbeing of society is maximized by setting the price of transport equal to the marginal cost. Should price exceed marginal cost, surplus profits to producers will encourage new entrants and increase of supply. This depresses the price towards marginal costs.,2020/8/14,Location th

39、eory,48,3.3.pricing transport service,A price below marginal cost will result in dead-weight losses which will drive producers out of business, thereby reducing supply and pushing price up towards the same equilibrium.,2020/8/14,Location theory,49,3.3.pricing transport service,The general policy pre

40、scription therefore is that if there is a serious disparity between price and cost resulting from imperfect operations of the market, the government should intervene to encourage socially optimal marginal cost pricing.,2020/8/14,Location theory,50,3.3.pricing transport service,In practice, transport

41、 facilities and services deny not only the efficacy of the market in determining the quantity supplied, but also the value of the simple marginal cost pricing rule.,2020/8/14,Location theory,51,3.3.pricing transport service,First, the long gestation period and large investment requirements for trave

42、ling ways and terminals of transport systems always put them beyond the scope of unsupported commercial interest.,2020/8/14,Location theory,52,3.3.pricing transport service,The political indispensability of good communications in terms of military and administrative access in forming and maintaining

43、 territorial hegemony supersedes other considerations.,2020/8/14,Location theory,53,3.3.pricing transport service,As some forms of transport, such as railways, require an enormous initial capital costs which exclude new entrants and monopolize the price, they require strict government control of the

44、ir prices.,2020/8/14,Location theory,54,3.3.pricing transport service,In developing area the transport sector as a whole is insufficient to meet the needs, so the policy issue is how to add transport capacity to promote the development of the area.,2020/8/14,Location theory,55,3.3.pricing transport

45、service,The question now is how to recover the total cost of additions to capacity. Road costs may be covered by government with a fuel tax incident on road users.,2020/8/14,Location theory,56,3.3.pricing transport service,if the total cost exceeds marginal costs, the remainder may be recovered by t

46、axing those whose land value is enhanced by the accessibility which roads afford, because the benefit of improved transport is ultimately reflected in the value of land.,2020/8/14,Location theory,57,3.3.pricing transport service,The principle of recovering construction costs by charges on improved p

47、roperty values is generally applicable. The US government was responsible for the method.,2020/8/14,Location theory,58,3.4.Measurement of Transport Benefit,As we discuss just now, the social benefit of a good or service was defined as the consumer surplus plus producer surplus or total revenue (S+R)

48、 . Although there is no market price for road space, road and public transport users do vary their use in response to a “price”.,2020/8/14,Location theory,59,3.4.Measurement of Transport Benefit,The price paid includes expenditure of the travelers time, including that spent in walking to and from parked vehicles. The price also has a cash component including tolls, parking charges, fares and vehicle running c