Summary

Samenvatting - Transport economics

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Course
Transport economics

Institution
Universiteit Antwerpen (UA)

Summary of Transport Economics by Professor Hintjens. The document covers the subject matter, with detailed notes on the graphs and theory. With this summary, I achieved a 14/20.

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Uploaded on May 25, 2024
Number of pages 83
Written in 2023/2024
Type Summary

transport
economics
graphs
theory

Institution
Universiteit Antwerpen (UA)
Education
Toegepaste Economische Wetenschappen: Bedrijfskunde
Course
Transport economics

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1 Transport economics: Introduction
1 Course structure
CONTEXT

• 3 credits → 24-30 course hours
• Written exam, closed book
• Pre-requisites:
o Basic knowledge of economics, business economics and research methodology
• Final competences
o Analyst: You have analytical insight in logistics and transport.
o Analyst: You master generic principles and research methods .
o Analyst: You have ready knowledge of logistics and transport, at management level.
o Communicator: You can formulate an answer to an open exam question concerning
transport economics in a clear and structured way.
• Lecture material:
o Asynchronous videos with theory
o Synchronous (online or on-campus) application and Q&A
o Slides (via blackboard)
o Book: G. Blauwens, P. De Baere, E. Van de Voorde, Transport Economics, 7th edition,
De Boeck, 2020, ISBN 978 90 306 9662 9 Part I.1 The traffic and Transport system;
Part III – Transport Supply and Demand; Part IV – Transport Policy

COURSE STRUCTURE

• 1. On-line, asynchronous lecture, theory
o To be watched before the synchronous case lecture
• 2. On-campus synchronous application and Q&A – attendance required
• 3. Rinse and repeat
• 4. Guest speakers

2 Our department
INTERNATIONAL CO-OPERATION

• TransportNET (co-operation agreement between 7 European transport universities)
o Karlsruhe Institute of Technology
o University of Lyon
o University of Lisbon
o Delft University of Technology
o University of Antwerp
o University of Genova
o University of the Aegean
• Education and research

,RESEARCH THEMES

• The interaction between transport and economics
• Freight transport
• The port and maritime sector
• The air transport business and markets
• Urban logistics and distribution
• The assessment of infrastructure projects
• Strategic analyses and policy recommendations (private companies, authorities)
• Interaction between transport and physical planning
• Urban studies and regional economics

3 Varia
FLOWS

• Online magazine (in Dutch) on the transport and maritime world
• Background information for courses, bachelor/master, thesis,…
• Practical information on how to register: see blackboard

INTERESTED IN TRASNPORT AND LOGISTICS?

• Master maritiem en logistiek management (in Dutch)
o In-depth knowledge about transport and logistics world
o Economic, legal and technological perspective
o Strong link with practice (excursions, guest lectures)
o Start of your own network in the sector
o Own Dutch-speaking master on this topic in Flanders
• Interested?
o www.uantwerpen.be/master-maritiem-en-logistiek-management

4 Contact data

,5 Derived demand
DERIVED DEMAND GRAPH

• !!! Transport is a derived demand
o Nobody transport goods just for the fun of transporting
o Nobody travels for the fun of driving from A to B
▪ The going itself is not the object of the travel
o Derived demand= there must be a reason to transport goods from A to B
▪ Therefor just building infrastructure is a bad idea → if nobody wants to go
there
• Graph:
o Standard supply and demand picture
▪ Dg: demand for goods → going downwards → the lower the price, the
higher the quantity
▪ Sa: supplier will supply more if the prices are higher → going up
o Crosspoint A: balance between supply and demand
▪ BUT what is often forgotten, is that there are actually customers at point
K&C who are willing to pay more, but that doesn’t mean that they will pay
more. If someone is selling at price A, why would you pay price K or C.
o Consumer surplus:
▪ Triangle above line A
▪ People who actually want to pay more than A, but don’t need to pay more
than A, so they make a profit
▪ Same can happen on the supply side
▪ WTP= willingness to pay
o Producer surplus
▪ Some suppliers would have been willing to sell at price L or B
▪ These people are making profit because they are selling at price A, but there
actual price was B or L so they get more money then they wanted
o Producer + consumer surplus
▪ Allows for transport
▪ Imagine a supplier L and a customer K. L is willing to sell at a lower price than
the market price and K is willing to pay a higher price than the market price.
▪ So there is a difference between the price that L wants and the price that K is
willing to pay (K-L=M)
▪ K-L=M (vertical line going from K to L) → = the amount of money that they
are willing to pay for transport (amount available for transport)
• And C-B=T
o ° Second pair of demand and supply curves
▪ St: supply of transport (increases)
▪ Dt: demand for transport (drops)
▪ Equilibrium M= people are willing to pay an M amount for transport which
covers the distance from K to L.
• If there would be no price difference from K and L, there would be
no demand for transport

, • Why do people transport goods from A to B ?
o Because they can get a better price in B than in A (this is what the graph shows)
o At a destination point, they get a better price at the origin point and this price
difference can be used to pay for transport
o M.a.w worthless at the point of collection but valuable at the point of consumption

DERIVED DEMAND (steps explained)

• Traffic and transportation hardly ever arise spontaneously
• Traffic and transportation are the result of some other primary need for goods and services
• Traffic and transportation thus shows an intermediary character and it is a derived need
(derived nature)
• Graphical analysis: the derived nature of transport demand
o Starting situation: a commodity is supplied in Antwerp and demanded for in Ghent,
and the commodity thus needs to be transported
o Step 1: consider a quantity x (less than Y)
o Step 2: determine the delivery price OB
o Step 3: determine the willingness to pay OC
o Step 4: OC – OB gives the basics of calculating the MAXIMUM cost of transportation
o Step 5: derive Dt
o Step 6: assume St (upward sloping curve and based on marginal costs)
o Step 7: determine E (new quantity equilibrium taking into account transportation
costs)

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