Scandinavian Working Papers in Business Administration

Discussion Papers,
Norwegian School of Economics, Department of Business and Management Science

No 2010/4: The impact of pecuniary costs on commuting flows

David Philip McArthur (), Gisle Kleppe (), Inge Thorsen () and Jan Ubøe ()
Additional contact information
David Philip McArthur: Stord/Haugesund University College, Postal: Stord/Haugesund University College, Klingenbergvegen 8, N-5414 Stord, Norway
Gisle Kleppe: Stord/Haugesund University College, Postal: Stord/Haugesund University College, Klingenbergvegen 8, N-5414 Stord, Norway
Inge Thorsen: Stord/Haugesund University College, Postal: Stord/Haugesund University College, Klingenbergvegen 8, N-5414 Stord, Norway
Jan Ubøe: Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Finance and Management Science, Helleveien 30, N-5045 Bergen, Norway

Abstract: In western Norway, fjords cause disconnections in the road network, necessitating the use of ferries. In several cases, ferries have been replaced by roads, often part-financed by tolls. We use data on commuting from a region with a high number of ferries, tunnels and bridges. Using a doubly-constrained gravity-based model specification, we focus on how commuting responds to varying tolls and ferry prices. Focus is placed on the role played by tolls on infrastructure in inhibiting spatial interaction. We show there is considerable latent demand, and suggest that these tolls contradict the aim of greater territorial cohesion.

Keywords: Commuting flows; pecuniary costs

JEL-codes: R10; R12

24 pages, May 19, 2010

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