Know the basic principles of transport economics before writing an assignment

Learning transport economics is an important part of any civil engineering course. The subject is considered as the conjugation of engineering and microeconomics as it is “study of the movement of people and goods over space and time”. However, the subject is also a branch of financial economics that studies the distribution of resources within the transportation segment.

Yesterday, a student sent me an essay on transport economics. While I was reading the essay, I could understand that he did not understand the basic principles of the subject, because of which the essay was poorly written. This is the issue of many students. It is very important for you to know the basic principles of the subject.

I have noticed that the books explain the basic principles of the subject in a complicated manner. Tough words and complex sentences often confuse the students. Moreover, sometimes the professors do not explain things properly. Due to these reasons, understanding the subject becomes difficult.

In this blog, I am going to explain a few important principles through simple words that will help you to understand the concept of the subject.

The subject looks at the factors that determine the economic policies and considers the measures adopted to influence the outlook of the people at the disadvantages and reduce the same.

To provide you with a better insight into transport economics, I will talk about demand, supply, elasticity and characteristics of the transport market.

·         Demand 

Demand stands for the quantity of goods that is wanted by individuals living in a specific geographic location. Demand is determined by three factors, namely:

Ø  The income of the consumer

Ø  The price of substitute goods

Ø  The preference of the consumer

·         Supply 

Supply is the total amount of the goods available to the consumers. It is subject to change, based on the factors like resources, raw materials, etc. 

The determinants of supply are many. To meet the supply for a product or service, one has to pay attention to the two factors listed below:

Ø  Short-run costs

Ø  Long-run costs

·         Elasticity 

Suppose a bus company wishes to increase the fare, the company has to consider a number of questions, such as the reaction of the passenger, increase/decrease in the number of passengers, increase/decrease in revenue, etc. 

The theory of elasticity must be considered here. Elasticity measures the degree of change in a response variable (reaction of the passenger, increase/decrease in the number of passengers, increase/decrease in revenue) due to a degree of change in a stimulus variable (increase in fare). 

Two types of elasticity are:

Ø  Demand elasticity

Ø  Supply elasticity

·         Characteristics of the market 

Considering the characteristics of the transport market, if one has to apply the principles of demand and supply, the individual must know the market. 

While defining a specific transport market, these characteristics must be considered

Ø  The mode of transportation

Ø  The transport relation

Ø  The purpose of the trip

Ø  The time of the trip 

To conclude, you must understand these four basic factors very well if you have to understand the subject and score desired grades. If the principles are not clear to you, feel free to opt for online academic assistance.