Road investment effects with private and public users and the Downs-Thompson paradox (original) (raw)

Using a general equilibrium model, the paper evaluates the welfare effects and likelihood of occurrence of the Downs-Thompson paradox in a context where public and private transport share the same infrastructure. Departing from a model developed by Williams [1] the paper assumes, more realistically, interdependent supply functions (interrelated cost curves). The paper concludes that the likelihood of the Downs-Thompson paradox occurring is greater than it is usually thought as it is more likely that the disbenefits to the public transport users are greater than the benefits to private transport users when we have road investments. 1 1 c c > , in the terms of his model, takes place if: