ABSTRACT
This chapter examines the analytical techniques so far developed and their application to the shorter term problems of managing the urban transport infrastructure. The simple rule for welfare maximisation would be to secure that particular number of trips, origin and destination of trips, modal split and that routing of traffic would exist if the prices charged for all types of transport in all situations reflected marginal social cost. The closeness with which an instrument can approach the optimum allocation of traffic will need to be considered in the light of its welfare distribution and environmental implications. The instruments are road pricing approach, traffic restraint approach and public transport subsidy approach. Hence, the formulation of an appropriate urban transport management policy calls for accurate demand forecasting procedures, careful economic analysis and substantial practical planning and engineering skills. In order to appreciate both the capabilities and the limitations of the whole range of policy instruments available.
