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Transportation

, Volume 10, Issue 3, pp 233–245 | Cite as

Microeconomic theory and generalised cost

  • Nils A. Bruzelius
Article

Abstract

In a number of articles in this journal the use of generalised cost in travel demand analysis and transport planning has been subject to debate. However, some of the fundamental problems raised in these articles are left unanswered — e.g., the precise relationship between conventional microeconomic consumer demand theory and generalised cost, an issue with which this article is concerned. It is shown here that necessary and sufficient conditions for expressing travel demand in terms of generalised cost are that this cost, when measured in monetary units, is linear, and that the time variable is weighted by a constant marginal value of time. It is also shown that these conditions imply strong assumptions about the consumer's behaviour — e.g., that the willingness to pay to save time whilst travelling is not a function of real income.

Keywords

Income Time Variable Fundamental Problem Strong Assumption Technology Management 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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References

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Copyright information

© Elsevier Scientific Publishing Company 1981

Authors and Affiliations

  • Nils A. Bruzelius
    • 1
  1. 1.VVB Consulting Engineers, Architects and EconomistsMalmoeSweden

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