Insititute of Transportation Studies University of California at Berkeley The Full Cost of Intercity Transportation – A Comparison of High Speed Rail, Air and Highway Transportation in California David Levinson David Gillen Adib Kanafani Jean-Michel Mathieu RESEARCH REPORT UCB-ITS-RR-96-3 June 1996 ISSN 0192 4095 Acknowledgments This research was funded by the California Department of Transportation’s Division of New Technology, Materials and Research. During the conduct of this research we benefited from numerous discussion with a number of staff of the Department, as well as of the California High Speed Rail Commission. We particularly like to acknowledge useful comments and suggestions from Dan Leavitt, Coco Arriaga, and George Smith. In addition to the authors, the research team included Dr Tom Rheinhold, whose contributions we would like to acknowledge. We also wish to acknowledge the valuable contributions of Marie Burnett and Ping Hale in editing and producing this report. TABLE OF CONTENTS EXECUTIVE SUMMARY ..................................................ES-1 CHAPTER ONE ...............................................INTRODUCTION 1.1 OBJECTIVES .................................................................................1-1 1.2 SCOPE OF RESEARCH AND OUTLINE OF REPORT................................1-2 CHAPTER TWO....................A FRAMEWORK FOR COST ANALYSIS 2.1. CONCEPTUAL FRAMEWORK ..........................................................2-1 2.1.1 External And Internal Costs ...............................................................2-1 2.1.2 Short Run Versus Long Run Costs.......................................................2-2 2.1.3 Common And Joint Costs .................................................................2-3 2.1.4 Economies Of Scale ........................................................................2-4 2.1.5 Economies Of Traffic Density.............................................................2-4 2.1.6 Economies Of Capacity Utilization .......................................................2-5 2.1.7 Economies Of Scope .......................................................................2-5 2.2. CARRIER COSTS...........................................................................2-7 2.2.1 Air Carriers ..................................................................................2-7 2.2.2 Intercity Buses ..............................................................................2-7 2.2.3 Railway Services............................................................................2-8 2.3. INFRASTRUCTURE COSTS ........................................................... 2-10 2.3.1 Airports .................................................................................... 2-11 2.3.2 Highways.................................................................................. 2-11 2.3.3 Railways ................................................................................... 2-12 2.4. SUMMARY OF THE COST STRUCTURE FOR CARRIERS AND INFRASTRUCTURE ..................................................................................................... 2-13 2.4.1 Air .......................................................................................... 2-13 2.4.2 Road........................................................................................ 2-13 2.4.3 Rail ......................................................................................... 2-14 2.5. SOME INTERNATIONAL ESTIMATES OF FULL COST ......................... 2-15 2.6. ANALYTICAL FRAMEWORK FOR COST MODELING .......................... 2-17 CHAPTER THREE: ............................................ SOCIAL COSTS 3.1. DEFINITIONS ...............................................................................3-1 3.1.1 Economic Tradeoffs ........................................................................3-3 3.1.2 Systems Approach..........................................................................3-4 3.1.3 Classifying Externalities ...................................................................3-6 3.2. MEASURING THE COST OF EXTERNALITIES .....................................3-8 3.2.1 Issues Concerning The Economic Cost Of Externalities ...............................3-9 3.2.2 Cost-Function Estimation Methods..................................................... 3-10 3.2.3 Incidence, Cost Allocation And Compensation ....................................... 3-15 3.3. NOISE....................................................................................... 3-22 3.3.1 Measuring Noise.......................................................................... 3-22 3.3.2 Noise Generation ......................................................................... 3-23 3.3.2.1 Highway Noise......................................................................... 3-23 3.3.2.2 High Speed Rail Noise ................................................................ 3-24 3.3.2.3 Aircraft Noise........................................................................... 3-26 3.3.3 Noise Damage And Protection Costs................................................... 3-27 3.3.4 Integrated Noise Model .................................................................. 3-31 The Full Cost of Intercity Transportation Page C-1 3.3.4.1 High Speed Rail ........................................................................ 3-32 3.3.4.2 Highway................................................................................. 3-34 3.3.4.3 Air........................................................................................ 3-35 3.4. CONGESTION AND TIME.............................................................. 3-37 3.4.1 Delay ....................................................................................... 3-38 3.4.1.1 Highways ............................................................................... 3-38 3.4.1.2 Air Transportation...................................................................... 3-39 3.4.2 Value Of Time............................................................................. 3-40 3.4.3 Marginal Cost Functions................................................................. 3-44 3.4.3.1 Highway................................................................................. 3-44 3.4.3.2 Air........................................................................................ 3-46 3.4.4 High Speed Train ......................................................................... 3-48 3.5. ACCIDENTS............................................................................... 3-49 3.5.1 Accident Rates............................................................................. 3-49 3.5.1.1 Highway................................................................................. 3-49 3.5.1.2 Air........................................................................................ 3-55 3.5.2 Value Of Life And Injury ................................................................ 3-56 3.5.3 Comprehensive Costs .................................................................... 3-59 3.5.4 The Full Cost Of Accidents.............................................................. 3-61 3.5.4.1 Highway................................................................................. 3-61 3.5.4.2 Air........................................................................................ 3-63 3.6. AIR QUALITY ............................................................................. 3-65 3.6.1 The Nature Of Air Pollution ............................................................. 3-65 3.6.2 Emission Rates By Mode ................................................................ 3-70 3.6.2.1 Trains .................................................................................... 3-70 3.6.2.2 Aircraft................................................................................... 3-72 3.6.2.3 Automobiles............................................................................. 3-75 3.6.2.4 Greenhouse Emissions For Cars And Airplanes ................................... 3-77 3.6.2.5 Health Damages ........................................................................ 3-78 3.6.2.6 Macro-Economic Models.............................................................. 3-84 3.6.3 Cost Of Prevention And Mitigation..................................................... 3-85 3.6.3.1 Reduced Emissions From Diesel Trains............................................. 3-85 3.6.3.2 Carbon Mitigation Through Forestation And Other Means........................ 3-86 3.6.4 Full Cost Of Pollution.................................................................... 3-90 3.6.4.1 High Speed Rail ........................................................................ 3-90 3.6.4.2 Aircraft................................................................................... 3-90 3.6.4.3 Highways ............................................................................... 3-91 CHAPTER FOUR: ..................................................HIGHWAYS 4.1. User Costs And Transfers...................................................................4-1 4.1.1 A Model Of Car Price ......................................................................4-4 4.1.2 The Average And Incremental Cost Of An Owned Car ................................4-7 4.1.3 The Cost Of A Rented Car.................................................................4-8 4.1.4 Price Estimates ..............................................................................4-8