Monday, 1 March 2010

March 1: Transport as a derive demand, Organisation of transport in the UK, Market concentration

A definition of ‚Transport‘
Tranport: the movement of people and goods for personal and business reasons
Covers three important aspects:
- Movement: the physical carriage of people and goods over a particular distance
- Purpose: the reasons why people and businesses find it necessary to use some means of transport
- Carriage: what is actually being moved, people or goods, how many or how much; in case of goods, the type of product moved.
Two other important aspects:
- Mode of transport: means of transport, basically road, rail, air and sea transport.
- Infrastructure: anything that provides for the operation of transport, basically roads, motorways, seas channels, flight paths and rail tracks.
Passenger Transport vs. Freight (goods) transport: certain modes, such as railways, ferries and scheduled aircraft are shared by both, but in the main, the two types consist of different sets of modes.
The function of transport: to meet the needs of people and firms for efficient movement.
The demand for transport
Derived demand: demand that depends upon the final output that is produced.
Eg. - the demand that a company has for freight transport is derived from its needs to move goods from a factory to customers; the reasons are invariably a function of a firm’s business (eg. a large supermarket chain, a food processing firm, an electricity generating plant)
- the demand that a person has for passenger transport is derived from his/her needs to travel to college, go to the supermarkert or visit friends.
Transport is...
- demanded not just for what it is, but for what it does to enhance personal and business well-being.
- a type of input into the production process of firms and the lifestyles of people.
National Travel Survey: a periodic survey of the travel patterns of households; shows the derived demand nature of person transport
- 84 % of trips made by housholds were by car, excluding walking.
- The greatest purpose of travel by car was for commuting and business trips
- The most important reason for using rail was for commuting and business travel
- 8 % of trips made were by bus; these spread across all journey purposes
- Around a half of all car trips made were for journeys of less than five miles
- The overall number of household trips decreased by 4 % over the past ten years; 8 % fall in the number of commuting trips.
- The average length of trip for most purposes increased by 6 to 8 %.
- Trends in travel patterns

Average distance travelled per person per year has remained relatively stable over the last ten years at around 7,100, but declined slightly in 2008.
Between 1995/97 and 2005 the proportion of households in Great Britain without access to a car fell from 30% to 25% while the proportion with two or more cars increased from 25% to 32%. Car availability has levelled off since 2005.
Since 1995/97 the proportion of men with a full driving licence has remained relatively stable, at around 81% but it has continued to increase among women, from 57% to 65% in 2008. Licence holding also continued to grow among older people.
- Travel by mode and purpose

Trips by car (driver and passenger) accounted for 63% of all trips made and almost 80% of distance travelled.
Between 1995/1997 and 2008 the average distance travelled by local bus outside London increased by 8% and the distance travelled by bus in London increased by 61%.
Over the same period, the average distance travelled by surface rail increased by 54%, accounting for 8% of all distance travelled in 2008.
In 2008 Commuting and business trips accounted for 19% of all trips made, and represented 28% of all distance travelled. Shopping accounted for 19% of all trips but only 13% of distance travelled.
- Travel by age and gender

On average, women make more trips than men, but men travel much further per year. The gap in distance travelled is narrowing as travel patterns for men and women change. Since 1996 the average distance travelled as a car driver has fallen by around 10 per cent among men but has increased by over 20% among women.
Just under half of primary school children walked to school in 2008, with a further 43% of children being driven to school. For secondary school children, two fifths of pupils travelled on foot, while a fifth travelled by car and a further fifth used local bus services.
The take up rate of concessionary fare passes among people aged 60 and over has increased from 52% in 2002 to 63% in 2006 and 73% in 2008. This reflects changes to the coverage and eligibility of concessionary fare schemes since 2002.
- Social inclusion and accessibility

In 2008, 51% of households in the lowest income quintile had no car compared with 11% in the highest income quintile. However, the gap in car availability between high and low income households is narrowing as car ownership increases among low income households.
Overall, 4% of people who were employed said they always worked from home, and a further 16% said it was possible for them to work from home.
The proportion of households who order goods to be delivered increased from 64% in 2002 to 70 per cent in 2008. The proportion making their last order online increased from 26% to 67% over the same period.
The determinants of a household’s demand for private car transport:
- the cost of running a car
- the relative prices of other modes of transport
- household income
- car availability/ownership (invariably the most important determinant of demand)
- size of household
- taste and fashion
- quality factors relating to convenience, journey times and level of congestion
The determinants of a firm’s demand for a particular mode of freight transport:
- the cost
- the convenience in terms of ease of collection and delivery
- the type of goods carried
- the level of service provided.
For most firms, there is little or no modal choice:
eg. inland transport: mostly by road (firms have to decide whether to tranpsort their products in their own vehicles or contract out to a third pirty), increasingly by rail.
Advantages and disadvantages of the main modes of transport:
Passenger transport:
Private Car:
- most flexible and convenient mode
- only one that can give door-to-door service
- widely used for all types of journey purpose
- can be used to carry shopping, luggage
- least environmentally acceptable of main modes
- most effective on main corridors in large towns and cities
- more attractive to users when frequency involves only short waiting times
- users are limites by the service provided ?
- speedy carrier of large volumes of passengers over middle to long distances and for access into cities and large towns.
- clearly advantageous in that it can move passengers over longer distances at speed
- high environmental costs, although more airlines are now becoming more fuel efficient.
Freight Transport:
- convenient
- flexible
- connective
- suitable for carriage of most goods
- best suited to moving bulk loads over varying distances
- containers provide an efficient and speedy means of moving goods to ports and to rest of the EU
- problems of interchange can reduce its efficiency
- appropriate for moving time-sensitive and expensive cargo, mainly over long distances
- cheap when moving bulk cargoes or containers, particularly over long distances
- slow
- For passenger and for freight, road transport has substantial advantages over all other modes of transport for most types of demand. (As a result, in the Uk, road has a dominat market share for inland transport.)
- Rail’s role is more specific.
- Environmentally, rail is more acceptable than road transport (excluding the bus) for transporting both people and goods.

Organisation of transport in the UK
Privatisation: the sale of state-owned business activity to the private sector.
As a result...
Predominant private sector ownership of transport operations:
- the operation of transport services is fully private sector responsibility
- the position of infrastructure is more complicated, but private sector has had an increasingly important role in recent years
- Freight transport operations:
o Road freight and distribution
• DHL, Wincanton, TNT, Eddie Stobart
o Rail freight
• EWS (DB), Freightliner, GB Railfreight
o Domestic air services
• BA, Flybe, BMI
- Passengers transport operations:
o Local and long-distance bus and coach services
• Arriva, First Group, Stagecoach
o Train-operating companies
• Nation Express, Virgin Trains, Cross County Trains
o Ferry Services
• P&O, Norfolkline
Many of these companies have business interests across more than one mode (eg. First Group – largest bus company in the UK, major passenger train operating company, small provider of rail freight services)
Note: the largest providers of freight services have been taken over by non-UK companies
- private vehicle ownership not included; individual’s choice; this mode of transport is exclusively for private use.
- Government has no direct part to play in providing transport services; indirectly, through its policies (eg. subsidy), can be influential; thus enables the retention of a range of loss-making local bus and rail services.
The provision of infrastructure can be in four forms:
- private goods
o UK’s principle and most regional airports owned by the British Airports Authority
o UK’s main container ports are privately owned
- Public Private Partnership (PPP)
o Metronet and Tube Lines, responsible for maintaining and upgrading London’s Underground.
- a publicly owned plc
o Network Rail; all profits that are made go back into the railway.
- direct provision by government.
o New roads and motorways, which are quasi-public goods, funded directly by central and local government from tax revenue.

Friday, 5 February 2010

AS Economics Review - The reasons for individuals, organisations and societies having to make choices

Economics - the study of how to allocate scarce resources in the most effective way.

Economic problem - how to allocate scarce resources among alternative uses.

Household - group of people whose spending decisions are connected.

Microeconomics - the study of how households (consumers) and firms (producers) made decisions in markets.

Macroeconomics - the study of issues that affect economies as a whole.

Wednesday, 3 February 2010

First Post

I am now linking to bbc

There are different teaching styles