Answer to Question #295689 in Microeconomics for GAyuni

Question

The World Health Organisation (WHO) global deaths as a result of road traffic accidents are 1.35 million per year with more than half of these being pedestrians, cyclists, and motorcyclists. In 2015 pollution from urban transport caused an average loss of 9 months of life expectancy and 482 000 premature deaths per year in the European Region. The economic cost of these health effects was valued at more than US$ 1.2 trillion per year.

1. Apply relevant economic theory to explain how, and analyze why, urban transport systems are failing to deliver efficient market outcomes.

2. Evaluate the range of policy options that could be used to ensure efficient and sustainable urban transport systems in the future.

 

Answer 1

1) According to the WHO records, the largest number of the death casualties by road are of pedestrians, cyclists and motorcyclists. Economically, the fore mentioned modes of transport are cheap and easy to access hence most people prefer using them. This in return translates to a higher death toll as majority of the travellers are using the fore mentioned modes of transport.

2)

• The government can introduce commuter trains that are cheap and easy to access so as to reduce the number of those traveling as pedestrians, cyclists and motorcyclists.
• The government can lower gas prices so as to make Public Service Vehicles (PSV) cheaper and affordable to most people.
• The government can reduce the taxes for Vehicles so as to make them affordable to most individuals thus reducing the number of pedestrians, cyclists and motorcyclists.