The social costs of intercity transportation: a review and comparison of air and highway

Abstract

This paper provides a comprehensive survey of the literature on the measures of social costs, providing an indication of the state of engineering and economic literature. We operationalize the new thinking about which externalities to consider in an analysis of the transportation system. We construct measures of each externality: noise, air pollution, accidents and congestion for the highway and air transportation modes, where possible as a function of the amount of output or use, rather than as simple unit costs. We find that noise is the dominant cost of air travel, followed by congestion, air pollution and accidents. For highway travel, accidents are the most significant cost, followed by congestion, noise and air pollution. The social costs of highway travel are about 15% of the full costs of a highway trip, while the smaller social costs of air travel are only 5% of the full costs of an air trip. A highway trip generates four to five times as much externality as an air trip.