Theoretical view points in transport economics are reviewed, both with short-run and for long-run considerations. The main issue is whether an average cost pricing or a marginal cost pricing system should be adopted. Although marginal costing has theoretical advantages, the implications of its introduction and the practical difficulties are such that a change-over from the present average variable costing virtually is prevented. A truly marginal cost pricing system would involve toll gates, with inevitable delays here and a complex set of differential toll rates. Long-run considerations with the additional effects of investment and expansion cannot be omitted, however various possible implications are discussed. Numerous objections, would be brought forward against heavily fluctuating and high toll rates during expansion before new roads were ready.
Abstract