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The Cost of Relying on the Wrong Power

PublicationArticle (with peer review)
Företagandets villkor, Richard Johnsson

Abstract

This paper investigates the effect on road wear and deformation of alternatives to the Fourth Power Law in a computable general equilibrium model of Sweden. The alternatives considered are the first through fifth powers, and the results indicate that the results are similar in all cases but when the first power is employed. This follows from the fact that designing the charge according to the first power amounts to a weight-distance charge rather than an axle-weight-distance. The paper also investigates the cost of designing a charge according to the wrong power, i.e. not according to the true relationship between road wear and road use. The results indicate that the cost of choosing the wrong power is relatively small, but slightly higher in the case of the first power. Indeed, there are several implicit costs that seem to have to be taken into account when implementing a charge according to the former power, i.e. a weight-distance charge.

Johnsson, R. (2004). ”The Cost of Relying on the Wrong Power – Road Wear and the Importance of the Fourth Power Rule (TP446).” Transport Policy, 11(4): 345-353.

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Road Wear and the Kilometre Charge
Article (with peer review)Publication
Johnsson, R.
Publication year

2005

Abstract

This paper investigates the effects of a re-introduction of a distance-related charge on heavy trucks in Sweden. The kilometre charge is set to cover the annual road maintenance costs and is calculated for 10 different truck and trailer configurations. Three scenarios are simulated in a CGE model of Sweden: (i) the charge alone is imposed; (ii) the charge is imposed while the sum of the annual Eurovignette charge and the annual vehicle tax is lowered to the minimum level set by the European Union; and (iii) as in the former but with twice the level of the kilometre charge. The results imply that the charge leads to significantly reduced road wear although it appears that most of the reduction stems from reduced trucking activity and not from substitution towards less damaging trucks. Extensive substitutions towards other modes take place and only between 56 and 78 per cent of the ex ante statically predicted amount of tax revenue could actually be expected to be collected once the charge is imposed. The effects seem to cancel out on aggregate.

Road Wear and the Kilometre Charge
Article (with peer review)Publication
Johnsson, R.
Publication year

2005

Abstract

This paper investigates the effects of a re-introduction of a distance-related charge on heavy trucks in Sweden. The kilometre charge is set to cover the annual road maintenance costs and is calculated for 10 different truck and trailer configurations. Three scenarios are simulated in a CGE model of Sweden: (i) the charge alone is imposed; (ii) the charge is imposed while the sum of the annual Eurovignette charge and the annual vehicle tax is lowered to the minimum level set by the European Union; and (iii) as in the former but with twice the level of the kilometre charge. The results imply that the charge leads to significantly reduced road wear although it appears that most of the reduction stems from reduced trucking activity and not from substitution towards less damaging trucks. Extensive substitutions towards other modes take place and only between 56 and 78 per cent of the ex ante statically predicted amount of tax revenue could actually be expected to be collected once the charge is imposed. The effects seem to cancel out on aggregate.

Road Wear and the Kilometre Charge
Artikel (med peer review)Publication
Johnsson, R.
Publication year

2005

Abstract

This paper investigates the effects of a re-introduction of a distance-related charge on heavy trucks in Sweden. The kilometre charge is set to cover the annual road maintenance costs and is calculated for 10 different truck and trailer configurations. Three scenarios are simulated in a CGE model of Sweden: (i) the charge alone is imposed; (ii) the charge is imposed while the sum of the annual Eurovignette charge and the annual vehicle tax is lowered to the minimum level set by the European Union; and (iii) as in the former but with twice the level of the kilometre charge. The results imply that the charge leads to significantly reduced road wear although it appears that most of the reduction stems from reduced trucking activity and not from substitution towards less damaging trucks. Extensive substitutions towards other modes take place and only between 56 and 78 per cent of the ex ante statically predicted amount of tax revenue could actually be expected to be collected once the charge is imposed. The effects seem to cancel out on aggregate.

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