Explain how the costs of the congestion can be estimated? Congestion is an all too familiar feature of most transport networks. It occurs when there is too much traffic for existing capacity so that the actual journey times taken by transport users are in excess of their normal expectations. Consequently, it is inefficient and costly to transport users. It does not affect commuters themselves, but also bring huge negative externalities to the society. According to the National Statistics, congestion costs UK economy ï¿½15 billion in 1989, and this figure jumped to 20 billion in 1999, increasing by a third just in a decade. Measurement of the costs of congestion in practice is a complex calculation and includes:
Firstly, additional value of time costs to motorists, particularly for work journeys. These costs can be obtained through average wage rate times delayed hours, which gives a very good estimate. Lost leisure time can also be calculated in the same way, just need to substitute wage rate with "leisure satisfaction". Moreover, delivery delays and cost penalties is the main cost of this category, and productivity lost is also included. Overall, time lost can be seen as precious, and hence this represents around 30% of whole congestion costs according to the statistics.
Secondly, additional staff/drivers, vehicles, repair costs are needed in order to tackle congestion. These costs can be known easily through registering extra labour costs, extra investment in vehicles and maintainess costs. This is an enormous amount of waste through productivity lost, and it carries on about another 30% of the whole cost.
Thirdly, additional fuel costs. Vehicles tend to drink more petrol at lower speed during congestion, therefore result in higher fuel consumption. Scientific methods enable us to calculate the fuel wastage through practical experiment, and this combines unit petrol cost would give us total amount of costs due to fuel wastage.
But additional consumption of fuel would also bring external costs to the society, and hence pollute atmosphere, cause air and noise pollution, and cause stress or disease to human life. Externalities tend to be tough to estimate, but we can establish a good approximation through additional health care costs and national environmental damage. These costs are also big contributors, and represent about 20% of the total costs.
Apart from the major costs, other indirect costs are also brought in at the same time. Although they are only a minor part, they can not be neglected. More accidents caused by congestion, which can be calculated through health care bill. Congestion would also change the property value, in which case, can be obtained through the difference. More importantly, congestion also lowers standard of living and restrict economic growth. This would be a major problem in the long run, and hence would discourage foreign direct investment.
Overall, congestion does a lot of harm to the economy and imposes huge amount of money not only to the present consumers, but also to the future generations. Discuss how a more sustainable transport policy may reduce the costs of traffic congestion. In the last century, road transport has brought huge amount of benefits to the UK economy, but at the same time, it suffers from a major problem-congestion. Congestion has one definite outcome-delay! Too much traffic chasing too little road space results in traffic speeds falling to as low as 10 miles/hour in most cities. This is below our expectations both as drivers and users of public transport.
Moreover, the air is thick with poisonous fumes; for motorists and most public transport users, simple journeys are fraught with frustration and stress. Road rage and gridlock are part of the complex problem of congestion. Traffic congestion is a good example of market failure; social efficiency is not achieved for the reasons stated above. Consequently, the actions of road users affect people other than themselves, so causing side effects or externalities