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Transport DIFFERENT
User Reaction and Efficient DIFFERENTiation of Charges and Tolls

In the European Union, levels and structures of transport infrastructure charges vary strongly across transport modes and countries. Some degree of convergence exists but, in the presence of unsolved practical and theoretical difficulties, any such convergence is slow.  Moreover, the charging regimes that can be observed are often far from internalising external costs and are rarely based on efficiency principles.  In this situation, differentiation of existing charges appears to be a sensible first step. DIFFERENT proposes to investigate the possibilities of success for such an approach from a theoretical and empirical perspective. The theoretical analysis will reveal how much differentiation successful pricing schemes should exhibit, given that there are economic costs of price differentiation and problems of political implementation. The additional perspective of psychology will be added to the research, in particular with respect to passenger transport, in order to complement the economist’s perspective on user reactions to differentiated charging. The empirical analysis will focus on estimating elasticities and on case studies. Estimations will be carried out for freight and passenger transport on road, rail, water and air in a wide spectrum of European countries.  The main basis for these estimations will be real-world case studies, new Stated Preference and Revealed Preference surveys and modelling work. Particular attention will be paid to the effects of price differentiation on revenues, because in many countries there are plans to replace the existing system of tax based infrastructure financing with a system based on user charges. As a final step the results of this research will be interpreted in view of their relevance for the CETP and the European Pricing Reform.

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