ABSTRACT
Prices play a key role in resource allocation. They are particularly important in transport because it is an intermediate good used in the production of almost every other commodity in the economy. The subject will be treated in this chapter as follows . First, pricing principles will be discussed ; then current pricing policies in the transport sector will be analysed, making a distinction between the pricing of road space and public transport pricing. With each, current practice will be compared with the principles, and the implications of some suggested modifications will be examined. Finally , some of the more complex problems of finding the best relationship between the prices of public and private transport will be analysed. Attention will be concentrated throughout on matters affecting economic efficiency, and in consequence aspects such as the effects of alternative pricing policies on income distribution will be given only passing mention.
