Social costs are defined as the summation of private expenses that comes as a result of the transaction costs imposed on the final consumers as a result of being exposed to various transactions that are not charged or compensated. Social costs play significant roles in transport economics. First, it is imperative in understanding that social costs can enhance various transportation projects. As a result, this can lead to positive impacts on the objectives of a society’s economic development, including employment, productivity, property values, and business activity, as well as tax and investment revenues.
In general, it is crucial in understanding that social costs in transportation can significantly assist in improving the overall accessibility. For instance, they are capable of improving the capability of a business in providing goods and services anywhere at any time. They are as well capable of improving the ability of people to access education and employment opportunities. As a result, Gössling and Choi (2015) posit that this helps in reducing the costs of transportation, such as vehicle operating costs, travel time, pollution and accident damages, as well as the costs of road and facility parking. This ultimately helps in increasing economic development and productivity.
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Besides, social costs in transportation also help in ensuring that there is appropriate care for avoiding the effects of double-counting that might have already been counted in both vehicle cost and travel time savings, in addition to safety or emission benefits. However, it is crucial in considering the full range of benefits that social costs have on transportation economic impacts, both negative and positive ( Sandow, 2019). For instance, an expansion of an urban highway may have the capacity to improve the access of motorists as well as reducing the costs per vehicle-mile. As a result, this would significantly assist in eliminating barriers to pedestrian travel in addition to stimulating more use of dispersed land for development patterns by lowering access through other modes and increasing the total amount of needed travel for reaching destinations. On the same note, social costs have helped in improving access to particular areas, thereby exposing businesses to more competitive and valuable markets. For example, this may allow local customers in more easily accessing the regional shopping centers.
Social costs in transport economics may result in a new public transport service or highway that eventually helps in increasing access to other areas by the community. As a result, this would significantly assist in increasing the labor pool of the business, and ultimately lowering their costs for obtaining the input services and materials, in addition to expanding their potential markets ( Banister & Button, 2015). As a result, this would significantly help in increasing the ‘economies of scale” within the production processes. It implies that there would be higher productivity via reduced costs per output unit. Besides, the social costs may result in enhanced accessibility, which increases the capacity of workers in accessing employment and education opportunities, in addition to increasing the access of residents to additional shopping opportunities. It would also assist in improving access to cultural and recreation activities.
Social costs in transport economics also help in improving the strategies of mobility management. Sandow (2019) observes that they are such as more effective road pricing, which can assist in enhancing more reliability in time travel, which eventually lowers the costs of scheduling and logistics beyond the savings of travel time. Importantly, social costs in transport economics would assist in establishing new links of transportation between ports and cities, and modern forms of inter-modal services and facilities at those particular locations. It would make it possible to develop new international trade patterns. As observed by Banister & Button (2015), in some situations, these new links may significantly assist in improving the effectiveness of business client/customer visits in addition to the deliveries of products.
Additionally, the social costs in transport economics have numerous benefits that always flow to the parties who entirely depend on transportation services as well as facilities for their activities. In some instances, those who most benefit from social costs are the business operations with the potential of achieving higher productivity or even operating cost savings ( Gössling & Choi, 2015). In the case of delivering cargos, the beneficiaries of social costs might be both the senders and receivers instead of the transportation organization that is actually doing the traveling. Furthermore, social costs in transport economies also make it possible in accounting for several business operations and benefits of scheduling, in addition to production economies and logistics benefits since they are considered as the valuation benefits for travel time for truck trips.
Finally, social costs in transport economics can result in several types of economic effects on communities, states, and regions. In this case, the facilities of transportation have always resulted in the expansion of business, additional tax revenues, and new creation of jobs ( Banister & Button, 2015). It is imperative in understanding that such positive economic effects reflect on the social costs of transport economics. Social costs in transport economics is also utilized in providing relatively low costs of transportation and travel services, saving more time to traveling individuals, in addition to being used in providing the opportunities of employment within the toll tax collection, and enhancing the social welfare.
References
Banister, D., & Button, K. (Eds.). (2015). Transport, the environment and sustainable development . Routledge.
Gössling, S., & Choi, A. S. (2015). Transport transitions in Copenhagen: Comparing the cost of cars and bicycles. Ecological Economics , 113 , 106-113.
Sandow, E. (2019). Til work do us part: The social fallacy of long-distance commuting. In Integrating Gender into Transport Planning (pp. 121-144). Palgrave Macmillan, Cham.
