Real change in transport prices by mode
Published (reviewed and quality assured)
Justification for indicator selection
Transport prices are themselves important drivers of individual and business transport decisions, affecting transport growth and modal split development, and can lead to changes in distribution management, location decisions and spatial planning.
The prices of transport services are the result of, on the one hand, autonomous market developments such as vehicle and logistics technology. However, on the other hand, they are influenced by government interventions such as taxation, infrastructure provision, regulation, and subsidies. Through these interventions, governments can cause price levels that reflect the external costs associated with different forms of transport. This may result in a shift between modes. Monitoring changes in transport prices by mode is considered a relevant variable to assess whether the system is providing economic incentives for a modal shift.
- No rationale references available
Real price indices of passenger transport based on a fixed transport product in the EU 25 Member States, relative to average consumer price index (HICP).
Harmonized Indices of Consumer Prices (HICPs) give comparable measures of inflation for the countries and country groups for which they are produced. They are economic indicators that measure the change over time of the prices of consumer goods and services acquired by households. In other words they are a set of consumer price indices (CPIs) calculated according to a harmonised approach and a single set of definitions.
In particular, HICPs provide the official measure of consumer price inflation in the euro area for the purposes of monetary policy and the assessment of inflation convergence as required under the Maastricht criteria.
Price indices, 2005 = 100. All indices are relative to the overall consumer price index (HICP), CP00.
Policy context and targets
No targets currently exist for transport user prices in the (liberalised) transport market. However, by applying fair and efficient pricing, the balance between transport modes may be affected, since the level of externalities and the room for improvement may differ between modes. The EC’s 2001 White Paper states that the rights and obligations of users should be recognised, including reinforcing the right to have access to high quality services providing integrated services at affordable prices (EC, 2001).
Transport prices can and should reflect a range of elements, including costs of tackling congestion, the greenhouse gas effect and building infrastructure, whilst also improving safety on the road or in public transport and minimising environmental disturbances. There is also the cost of investment to provide better control of transport, putting new trains on the tracks and building new infrastructure. Therefore the benefits of society and transport users should be reflected more or less in the price users pay for transport, but without affecting access to a good quality, continuous service throughout the Community. The Commission previously concluded that “one of the important reasons why imbalances and inefficiencies have arisen is because transport users have not been adequately confronted with the full costs of their activities … As prices do not reflect the full social cost of transport, demand has been artificially high. If appropriate pricing and infrastructure policies were to be pursued, these inefficiencies would largely disappear over time” (EC, 2001).
Passenger transport in Europe is predicted to grow by about 40 % between 2010 and 2050. With this significant growth in transport use, it is important that prices are monitored to see if users are given appropriate incentives to use more environmentally friendly modes of transport. Changes in transport prices drive individual and business transport decisions; fair and efficient price signals are required.
The cost of transport reflects market changes such as vehicle technology developments, international energy price evolution and state interventions through regulations, subsidies and taxation (see TERM 21). Government actions can internalise the environmental externalities of different transport modes, which can lead to users shifting between modes. The economic incentives for modal shifts can be monitored through the indicator of transport prices by mode.
Related policy documents
COM (2001) 370 final. European transport policy for 2010.
WHITE PAPER European transport policy for 2010: time to decideCOM (2001) 370 final
Methodology for indicator calculation
Transport prices data are collected annually from individual member states by EUROSTAT. The Harmonised Indices of Consumer Prices (HICPs) are used – a comparable index of consumer prices produced by each EU Member State. They are calculated according to a harmonised approach and a single set of definitions, providing an official measure of consumer price inflation in the euro-zone for the purposes of monetary policy in the euro area.
Methodology for gap filling
No gap filling has been undertaken in the development of this indicator.
No methodology references available.
EEA data references
- No datasets have been specified here.
External data references
Data sources in latest figures
No uncertainty has been specified
Data sets uncertainty
The accuracy of HICP is generally considered to be high. The accuracy of source data is monitored by assessing the methodological soundness of price and weight sources and the adherence to the methodological recommendations. There is a variety of data sources both for weights (National Account data, Household Budget Survey data, etc.) and prices (visits to local retailers and service providers and central collection via mail, telephone, e-mail and the internet are used). The type of survey and the price collection methods ensure sufficient coverage and timeliness. The outlets, from which prices are collected, are chosen to represent the existing trade and services network and they are based usually on three main criteria: Popularity with consumers, significant turnover from consumer sales and availability of goods and services included in the HICP basket. All the private households in the economic territory of the country are covered, whether resident or not and irrespective of their income.
Furthermore, Eurostat and the Member States are actively following up an Action Plan concerning quality adjustment and sampling issues. Concrete best practices have been agreed for a range of specific goods and services (in particular cars, consumer durables, books and CDs, clothing and computers).
The HICP does not capture changes caused by market shifts from one product to another of higher (or lower) quality. In particular, the increasing market share of low-cost air carriers for passenger travel does not put downward pressure on the price index. This issue is likely to have a significant impact on demand.
The method used by the UK to re-reference to 2005=100 differs from that used by all other EU and EEA countries in that the UK has used un-rounded index levels for rescaling and computed inflation rates from the unrounded and re-referenced index series.
No uncertainty has been specified
Short term work
Work specified here requires to be completed within 1 year from now.
Work descriptionShort Term Work The current Eurostat-data on transport price indices represent specific baskets of products. It would be interesting and valuable to add an indicator on actual price developments in the different market segments (car, air, etc.) This would be of additional value for use in TERM. With the aim of further developing an understanding of under what situations various modes are competitive on price, research on EU average freight transport prices and indices per mode is also needed (Eurostat). If the analysis is to shed light on the incentives given to limit transport volumes, the relevant indicator would be prices/expenditures per passenger-km or tonne-km. Long Term Work It would also be relevant to present data on trends in affordability of transport i.e. transport prices relative to income levels (e.g. how many hours of work is needed to pay for a litre of gasoline). Trends in affordability may better explain trends in transport volumes than merely the price tags. Finally, it would be beneficial to gain more information on the price of transport in the freight sector, particularly across a range of EEA member countries.
No resource needs have been specified
Deadline2015/12/31 00:00:00 GMT+1
Long term work
Work specified here will require more than 1 year (from now) to be completed.
Responsibility and ownership
EEA Contact InfoCinzia Pastorello
Frequency of updates
ClassificationDPSIR: Driving force
Typology: Descriptive indicator (Type A - What is happening to the environment and to humans?)
For references, please go to www.eea.europa.eu/soer or scan the QR code.
This briefing is part of the EEA's report The European Environment - State and Outlook 2015. The EEA is an official agency of the EU, tasked with providing information on Europe’s environment.
PDF generated on 24 May 2015, 10:29 AM