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An econometric analysis of motorway renewal costs in Germany

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  • Heike Link

    (German Institute for Economic Research, Berlin)

Abstract

This paper analyses the cost bahaviour of motorway renewal costs with the aim to derive an estimate of marginal infrastructure costs per vehicle-km of trucks as part of optimal road user charges. The analysis is based on cross-sectional data of motorway renewal costs and traffic volume per motorway section in Germany during the period 1980-1999. The translog model estimated in this paper includes the factor input prices for labour, material and capital, the average annual daily traffic volume of trucks and passenger cars with the respective second-order terms. and a set of dummy variables for regions (the German lŠnder) as well as for the type of material used for renewal as the most explanatory variables. In contrast to this, we could not find any significant influence of the age of motorway sections, the past renewal expenditures and the climate conditions measured as days with temperature fluctuations around zero. The cost elasticity, i.e. the relationship between marginal and average costs found in this analysis ranges from 0.05 up to 1.17 with a digressive increase of marginal costs.

Suggested Citation

  • Heike Link, 2004. "An econometric analysis of motorway renewal costs in Germany," Working Papers 09, Institute of Transport Economics, University of Muenster.
    • Handle: RePEc:mut:wpaper:09
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    Cited by:

    1. Link, Heike & Götze, Wolfgang & Himanen, Veli, 2009. "Estimating the marginal costs of airport operation using multivariate time series models with correlated error terms," Journal of Air Transport Management, Elsevier, vol. 15(1), pages 41-46.
    2. Luigi Benfratello & Alberto Iozzi & Paola Valbonesi, 2009. "Technology and incentive regulation in the Italian motorways industry," Journal of Regulatory Economics, Springer, vol. 35(2), pages 201-221, April.
    3. Paul J.J. Welfens, 2006. "Grundlagen rationaler Transportpolitik bei Integration," EIIW Discussion paper disbei144, Universitätsbibliothek Wuppertal, University Library.
    4. Neil Murray & Heike Link, 2020. "A Duration Approach for Estimating the Marginal Renewal Cost at German Motorways," Discussion Papers of DIW Berlin 1898, DIW Berlin, German Institute for Economic Research.
    5. Phill Wheat & Alexander D. Stead & William H. Greene, 2019. "Robust stochastic frontier analysis: a Student’s t-half normal model with application to highway maintenance costs in England," Journal of Productivity Analysis, Springer, vol. 51(1), pages 21-38, February.
    6. Andersson, Mats, 2011. "Marginal cost of railway infrastructure wear and tear for freight and passenger trains in Sweden," European Transport \ Trasporti Europei, ISTIEE, Institute for the Study of Transport within the European Economic Integration, issue 48, pages 3-23.
    7. Heike Link & Wolfgang Götze & Veli Himanen, 2006. "Estimating the marginal costs of airport operation by using multivariate time series model with correlated error terms," Working Papers 11, Institute of Transport Economics, University of Muenster.
    8. Jussila Hammes, Johanna & Volden, Gro Holst & Welde, Morten & Börjesson, Maria & Odeck, James, 2021. "Finding transport projects with high value for money : what are the socio-geographic determinants?," Working Papers 2021:4, Swedish National Road & Transport Research Institute (VTI).
    9. Yarmukhamedov, Sherzod & Smith, Andrew S.J. & Thiebaud, Jean-Christophe, 2020. "Competitive tendering, ownership and cost efficiency in road maintenance services in Sweden: A panel data analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 136(C), pages 194-204.
    10. Meunier, David & Quinet, Emile, 2010. "Tips and Pitfalls in PPP design," Research in Transportation Economics, Elsevier, vol. 30(1), pages 126-138.
    11. Link, Heike & Nilsson, Jan-Eric, 2005. "Infrastructure," Research in Transportation Economics, Elsevier, vol. 14(1), pages 49-83, January.
    12. Ozbay, Kaan & Bartin, Bekir & Yanmaz-Tuzel, Ozlem & Berechman, Joseph, 2007. "Alternative methods for estimating full marginal costs of highway transportation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 41(8), pages 768-786, October.
    13. Vergara-Novoa, Cristian & Sepúlveda-Rojas, Juan Pedro & Alfaro, Miguel D. & Soto, Pablo & Benitez-Fuentes, Paulo Andrés, 2020. "Analysis of revenues, costs and average costs of highway concessions in Chile," Transport Policy, Elsevier, vol. 95(C), pages 114-123.
    14. Yossi Berechman & Bekir Bartin & Ozlem Yanmaz-Tuzel & Kaan Ozbay, 2011. "The Full Marginal Costs of Highway Travel: Methods and Empirical Estimation for North America," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 19, Edward Elgar Publishing.
    15. Chris Nash & Jeremy Shires & Heike Link, 2010. "Quantifizierung der sozialen Grenzkosten des Straßenverkehrs: welches sind die wichtigsten Komponenten?," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 79(2), pages 13-38.
    16. Wheat, Phill, 2017. "Scale, quality and efficiency in road maintenance: Evidence for English local authorities," Transport Policy, Elsevier, vol. 59(C), pages 46-53.

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    More about this item

    Keywords

    Cost functions; motorway renewal costs; marginal costs; infrastructure charging; road transport;
    All these keywords.

    JEL classification:

    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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