Benefits and External Benefits of Transport: A Spatial View

Abstract

This paper inquires into the benefits of transport. We start by showing how transport is derived from the demand for other goods. Consequently, benefits can be directly related to the latter in terms of economic and social activities. These benefits relate to different dimensions: goods space (public-private), economic space (i.e., market structure) and geographic space. We will analyze to what extent a benefit in the (primary) goods market is also revealed in the (secondary) transport market.

Once we have inquired into the benefits, we analyze the question of external benefits which may relate to the demand or to the supply side of the transport market proper; we look further into potential links between externalities in the goods’ market and in the transport market. We define a “social transportation function” in contrast to the usual transportation function.

We find that market economies have an in-built tendency to capture emerging external benefits unless institutional settings oppose this. We argue that benefits of transport which are not captured by the market either imply some arbitrary definition of groups which make externalities identifiable (these delimitations of groups in a certain way even define the externality) or relate to evolutionary economic processes with open trajectories.