Exploitable results
In general, the Different project provided a general framework for identifying the preconditions for a fair and efficient implementation of pricing differentiation in transport, both theoretically and from a practical point of view.
In the theoretical parts of Different project several hypotheses were developed about the optimal degree of differentiation of infrastructure charges, reflecting both economic approaches as well as the viewpoint of psychology. Using a fact-sheet methodology these hypotheses were then confronted with the empirical facts derived from the case studies carried out within Different. Among the many results that emerged from this exercise the most important are:
- that pricing-schemes are rarely implemented in pure textbook forms but rather reflect a compromise between various aspects and approaches;
- that there is an optimal degree of differentiation beyond which further differentiation is counter-productive;
- that a political influence on pricing structures is always discernible and therefore should not be disregarded in the design of pricing-structures.
The factors that play a decisive role, when designing charging schemes, and therefore, that are essential for differentiation, were also identified. Normative economic theory identified three main dimensions, which must be taken into account:
- aims of pricing;
- cost structure;
- demand of infrastructure user.
Furthermore, the case studies undertaken within Different have revealed a multitude of very interesting results. The general result, which is often denied in transport economics, is that pricing is effective. This result has been obtained considering the following two aspects across modes of transport: 1) effects of price changes (do price changes have any effect at all on travel behaviour and mode choice?); 2) effects of differentiation (does differentiation have any effect at all on travel behaviour and mode choice?).
1) Effects of price changes
In general, the evidence collected within Different shows that price changes affect travel behaviour and mode choice.
In the case of interurban road transport evidence from case studies shows quite clearly that price changes lead to changes in transport demand. Different network structures cause different effects, but there can be no doubt that infrastructure pricing had substantial influence on travel behaviour. As far as urban car transport is concerned the case studies showed considerable effects in all cases, except for Rome.
The case of railways is very unclear, mainly due to severe data limitations, which are a consequence of the regulatory upheaval that the railway sector is currently running through. As to the air transport, in all cases investigated the effects of changes in starting and landing fees on the behaviour of airlines were rather limited. A closer look at the case studies reveals that the cost-share of airport-fees in the total costs of airlines is rather small, and it comes therefore as no surprise that airlines react rather inelastic to these fees. However, this is not to say that differentiation could not work in the future if charges became more substantial, and it would be premature to conclude that pricing in the airport sector is of no relevance for airlines.
Despite of the many case studies on ports, the picture of effects of price changes for the mode 'shipping' is not clear. However, evidence was found that differentiation aiming at more environmental sound performance of mitigation of risk might be used as a tool within a wider group of tools or policy measures.
2) Effects of differentiation
In general, the evidence collected within Different shows that differentiation affects travel behaviour and mode choice, but they depend very much on the particular mode under investigation and the particular circumstances.
In interurban road transport the differentiation of the German and Swiss HGV toll according to axle weight and emission classes showed clear effects. As far as urban car is concerned significant effects of differentiation could be detected in several cases analysed.
As already mentioned for the effects of price changes, the scarcity of data makes it very difficult to derive clear conclusions in the case of rail.
As to air transport, the Spanish case studies delivered evidence on substantial possible welfare effects of peak-load pricing. The Spanish case studies made also clear, however, that institutional constraints, currently prevent this welfare gains from being exploited. The Hamburg case study concerning noise charges showed no effect at all. This result, however, is closely connected to special political circumstances that surrounded the introduction of these charges. The case of London has led the conclusion that there is relatively little competition between airports (at least among the London airports). Therefore, price differentiation does not seem to be a competitive parameter of airports.
For what concern maritime transport, port dues amount only to a small share in shipping companies' overall voyage costs, which delivers a somehow similar picture to the results found in the airport case studies. Even though a clear direct impact of differentiation cannot be shown, it should be considered that differentiation as in the case of environmental differentiated charges in Sweden has contributed to greater awareness of the environmental challenges in the sector and in combination with other mechanisms has contributed to a shortened period of implementation of emission reducing technology in ships in a geographically limited area.
Finally, a number of finding and conclusions have been drawn regarding elasticities, user reactions, regulatory factors, institutional factors, welfare and general political effects, and psychological factors.
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