Real change in transport prices by mode

Indicator Specification
Indicator codes: TERM 020
Created 21 Aug 2007 Published 15 Sep 2010 Last modified 30 Aug 2019
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This indicator looks at real price indices of passenger transport based on a fixed transport product in the 28 EU Member States, relative to an average consumer price index, the Harmonised Index of Consumer Prices (HICP). The HICP gives comparable measures of inflation for the countries and country groups for which it is produced. It is an economic indicator that measures the change over time in the prices of consumer goods and services acquired by households. In other words, it is based on a set of consumer price indices calculated according to a harmonised approach and a single set of definitions. In particular, the HICP provides the official measure of consumer price inflation in the euro zone for the purposes of monetary policy and the assessment of inflation convergence, as required under the Maastricht criteria (also known as convergence criteria ).

Assessment versions

Published (reviewed and quality assured)

Rationale

Justification for indicator selection

Transport prices are important drivers of the decisions made about transport by individuals and businesses. They affect the transport use and drive shifts between the modes of transport used, and can also lead to changes in distribution management, decisions on location and spatial planning.

On the one hand, the prices of transport services result from autonomous market developments, such as developments in vehicle and logistics technologies. On the other hand, they are influenced by government interventions such as taxation, infrastructure provision, regulation and subsidies. Through these interventions, governments can generate price levels that reflect the external costs associated with different forms of transport. This may result in shifts in the use of different modes of transport. Monitoring changes in transport prices by mode is a relevant means of assessing whether or not there are incentives for a shift in the modes of transport used.

Scientific references

Indicator definition

This indicator looks at real price indices of passenger transport based on a fixed transport product in the 28 EU Member States, relative to an average consumer price index, the Harmonised Index of Consumer Prices (HICP).

The HICP gives comparable measures of inflation for the countries and country groups for which it is produced. It is an economic indicator that measures the change over time in the prices of consumer goods and services acquired by households. In other words, it is based on a set of consumer price indices calculated according to a harmonised approach and a single set of definitions.

In particular, the HICP provides the official measure of consumer price inflation in the euro zone for the purposes of monetary policy and the assessment of inflation convergence, as required under the Maastricht criteria (also known as convergence criteria).

Units

Price indices are used taking 2015 as a reference point (i.e. 2015 = 100). All indices are relative to the overall consumer price index (HICP), CP00 (HICP — all items (global or overall index/rate)). However, for the freight case study a reference point of 2010 = 100 is used. 

Policy context and targets

Context description

According to the 2011 Transport White Paper, 30 % of road freight transported over more than 300 km should be transported by other modes of transport, such as rail or water transport, by 2030, and more than 50 % should be transported by other modes of transport by 2050. As for passenger transport, most medium-distance passenger transport should be by rail by 2050. Given the significant growth predicted in transport demand, further measures are needed to achieve these aims.

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 TERM021). Government actions can internalise the environmental externalities of different modes of transport, which can lead to users to shift between modes of transport. This indicator, which monitors transport prices by mode, can be used to monitor the development of economic incentives for shifts in the modes of transport used (TERM020).

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 room for improvement may differ between modes. The 2011 Transport White Paper highlights the need to further promote the attractiveness of non-road modes of transport through a two-pronged strategy: first, to confront all modes with their full costs (including the costs of negative externalities), and, second, to directly improve the market conditions for non-road modes of transport.

Related policy documents

Key policy question

Are passenger transport prices increasing at a higher rate than consumer prices in Europe?

Specific policy question

Are freight transport prices increasing in Europe?

Methodology

Methodology for indicator calculation

Data on transport prices are collected annually from individual Member States by Eurostat. The HICP — a comparable index of consumer prices produced by each EU Member State — is used. The prices are calculated according to a harmonised approach and a single set of definitions, and they provide an official measure of consumer price inflation in the euro zone for the purposes of monetary policy.

Methodology for gap filling

Gap filling was not used in the development of this indicator.

Methodology references

No methodology references available.

Data specifications

EEA data references

  • No datasets have been specified here.

External data references

Data sources in latest figures

Uncertainties

Methodology uncertainty

No uncertainty has been specified.

Data sets uncertainty

The accuracy of the HICP is generally considered high. The accuracy of source data is monitored by assessing the methodological soundness of price and weight sources, and adherence to the methodological recommendations. There is a variety of data sources for both weights (national account data, household budget survey data, etc.) and prices (visits to local retailers and service providers, and central data collection via post, telephone, email and the internet are used). The type of survey and the price data collection methods used ensure sufficient coverage and timeliness. The outlets, from which price data are collected, are chosen to represent the existing trade and services network and are usually based on three main criteria: (1) popularity with consumers, (2) significant turnover from consumer sales and (3) availability of goods and services included in the HICP basket. All private households in the economic territory of the country are covered, whether resident or not and irrespective of income.

Furthermore, Eurostat and the Member States are actively working with an action plan concerning quality adjustment and sampling issues. 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.

Rationale uncertainty

No uncertainty has been specified.

Further work

Short term work

Work specified here requires to be completed within 1 year from now.

Long term work

Work specified here will require more than 1 year (from now) to be completed.

General metadata

Responsibility and ownership

EEA Contact Info

Diana Vedlugaite

Ownership

European Environment Agency (EEA)

Identification

Indicator code
TERM 020
Specification
Version id: 1
Primary theme: Transport Transport

Frequency of updates

Updates are scheduled once per year

Classification

DPSIR: Driving force
Typology: Descriptive indicator (Type A - What is happening to the environment and to humans?)
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