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 | | Kenneth A. Small | | Nonresident Fellow | |
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PROFILE |
Ken Small specializes in urban and transportation issues and environmental economics. Among his recent research topics are urban highway congestion, measurement of value of time and reliability, effects of fuel efficiency standards, public transit pricing, and fuel taxes.
For four years, he served as associate editor of Transportation Research Part B–Methodological, and he remains on the editorial boards of that and four other professional journals. He previously was North American co-editor of the international journal, Urban Studies. Small has served on several study committees of the National Research Council, examining, among other things, cost–benefit analysis and the federal program on congestion management and air quality. His book, Urban Transportation Economics, was recently updated in a new edition (Economics of Urban Transportation) and has become a widely cited standard reference in the field.
Small, a research professor and professor emeritus of economics at the University of California at Irvine, was honored in 1999 with the Distinguished Member Award by the Transport & Public Utilities Group of the American Economic Association, and in 2004 with the Distinguished Transportation Research Award by the Transportation Research Forum. He is the recipient of the Faculty Achievement award at UC-Irvine in 2007, and is a fellow of Regional Science Association International.
Small has advised many public and private groups including the Canadian Royal Commission on National Passenger Transportation, the European Union, the South Coast Air Quality Management District, the World Bank, and the California Air Resources Board. At Irvine, he previously served as chair of economics and associate dean of social sciences.
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DISCUSSION PAPERS | | Should Urban Transit Subsidies Be Reduced? | | Ian W.H. Parry, Kenneth A. Small | | RFF Discussion Paper 07-38 | July 2007 | | Related journal article | Abstract: This paper derives intuitive and empirically useful formulas for the optimal pricing of passenger transit and for the welfare effects of adjusting current fare subsidies, for peak and off-peak urban rail and bus systems. The formulas are implemented based on a detailed estimation of parameter values for the metropolitan areas of Washington (D.C.), Los Angeles, and London. Our analysis accounts for congestion, pollution, and accident externalities from automobiles and from transit vehicles; scale economies in transit supply; costs of accessing and waiting for transit service as well as service crowding costs; and agency adjustment of transit frequency, vehicle size, and route network to induced changes in demand for passenger miles.The results support the efficiency case for the large fare subsidies currently applied across mode, period, and city. In almost all cases, fare subsidies of 50 percent or more of operating costs are welfare improving at the margin, and this finding is robust to alternative assumptions and parameters. | | | | Does Britain or the United States Have the Right Gasoline Tax? | | Ian W.H. Parry, Kenneth A. Small | | RFF Discussion Paper 02-12 | March 2002 | | Related journal article | Abstract: This paper develops an analytical framework for assessing the second-best optimal level of gasoline taxation, taking into account unpriced pollution, congestion, and accident externalities and interactions with the broader fiscal system. We provide calculations of the optimal taxes for the United States and the United Kingdom under a wide variety of parameter scenarios, with the gasoline tax substituting for a distorting tax on labor income. Under our central parameter values, the second-best optimal gasoline tax is $1.01 per gallon for the United States and $1.34 per gallon for the United Kingdom. These values are moderately sensitive to alternative parameter assumptions. The congestion externality is the largest component in both nations, and the higher optimal tax for the United Kingdom is due mainly to a higher assumed value for marginal congestion cost. Revenue-raising needs, incorporated in a “Ramsey” component, also play a significant role, as do accident externalities and local air pollution. The current gasoline tax in the United Kingdom ($2.80 per gallon) is more than twice this estimated optimal level. Potential welfare gains from reducing it are estimated at nearly one-fourth the production cost of gasoline used in the United Kingdom. Even larger gains in the United Kingdom can be achieved by switching to a tax on vehicle miles with equal revenue yield. For the United States, the welfare gains from optimizing the gasoline tax are smaller, but those from switching to an optimal tax on vehicle miles are very large. | | | | The Value of Value Pricing of Roads: Second-Best Pricing and Product Differentiation | | Kenneth A. Small, Jia Yan | | RFF Discussion Paper 00-08 | January 2000 | Abstract: Some road-pricing demonstrations use an approach called "value pr icing", in which travelers can choose between a free but congested roadway and a priced roadway. Recent research has uncovered a potentially serious problem for such demonstrations: in certain models, second-best tolls are far lower than those typically charged, and the welfare gains from profit maximization are small or even negative. That research, however , assumes that all travelers are identical, and it therefore neglects the benefits of product differentiation, by which people with different values of time can choose a suitable cost/quality combination. Using a model with two user groups, we find that accounting for heterogeneity in value of time is important in evaluating constrained policies, and improves the relative performance of policies that offer differential prices. Nevertheless, for most of the reasonable range of heterogeneity, second-best pricing produces far fewer benefits than pricing both roadways optimally, and profit-maximizing tolls are so high that over all welfare is reduced from the no-toll baseline. | | | |
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