INFORMATION POLICY IN ROAD TRANSPORT WITH ELASTIC DEMAND - SOME WELFARE ECONOMIC-CONSIDERATIONS

This paper analyses the welfare impacts of providing different types o f information to a group of potential road users. Two groups of driver s are considered: informed and uninformed ones and three kinds of info rmation are dealt with: perfect, imperfect and no information. The lin k travel cost functions are assumed to be stochastic and the informati on concerns these random fluctuations. The analysis is limited to a on e and two link network and it is further assumed that the actors in th e model base their decision-making on rational expectations. Under the assumptions that demand and link travel cost functions are linear and that the population of travellers consists of a homogeneous group exc ept for their respective willingness-to-pay for making a trip, it is f ound that both the provision of perfect and imperfect information lead s to a strict Pareto improvement. Furthermore, the analysis reveals th at the more perfect the information, the more efficient the use of the transport network. Finally, the analysis concerning the two link netw ork (two routes running in parallel) shows that beneficial route split effects only exist when (1) the number of informed drivers is relativ ely small and (2) the stochastic shocks in the link travel cost functi on are relatively large. In these cases, the benefits to informed driv ers are substantially larger than when only mode split effects take pl ace.