KOTI - Korea Transport institute

In the transport sector, as in other sectors of economy, pricing is an invaluable mechanism by which scarce resources are efficiently distributed. However, pricing practices have been relatively rigid in Korea. While there are large temporal fluctuations in demand in many transport sectors, including tolled expressways and public transport services, peak-load pricing has been virtually absent.
In this research we have analyzed public perception toward peak-load transport pricing and evaluated its applicability and feasibility in areas where there are large discrepancy between capacity and demand. In the user survey we estimate users' willingness to pay for better amenities in transport services by direct questionnaire and supplement it by employing stated preference methodology and discrete choice modelling. From the analyses we conclude the current rigid transport pricing deviates from first best transport demand management leaving ample room for improvement. Macroeconomic impact analysis of transport pricing was included in this research. Three policy instruments including fuel pricing, subsidy, and mass transit pricing were analyzed in this research. These research outcomes are intended to provide scientific empirical evidences for better transport policy in a Korean context.