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Indicator Specification
Internalisation of external costs, a European Commission’s objective from the White Paper (European Commission 2001), sets the ground for enabling the full recovery of the external (mostly environmental and social) costs generated by the use of transport. Initially, and depending very much on the mode of transport, this will increase the costs of transport for the user, as the costs of air pollution, climate change and accidents will have to be paid for. In the long term, the effect on transport prices may be less since pricing policies should take into account the magnitude of external effects through adaptation, modal shift and reduced transport demand.
The indicator provides insight how relevant policy objectives are being met, which as:
The share of household expenditure on transport includes public transport (transport by train, bus, taxi, ferries and aircraft), operation of private vehicles and purchase of vehicles.
Total expenditure is defined as total private consumption in the National Account (CP00).
Transport (CP07) is defined as a sum of the National Account consumption groups for:
The proportion of household expenditure for private transport is defined as the sum of the private transport groups (CP071 + CP072 + CP073) divided by the total private consumption (CP00).
The classification of consumption groups is made according to the COICOP classification: Classification of individual consumption by purpose (Eurostat, 2000 and Eurostat, 2009).
Percentage of household expenditure on transport.
All prices are expressed in current prices.
There is a generally accepted close link between income and expenditure on transport (Bureau of Transportation Statistics, 2000). In general, people tend to spend a relatively stable share of their income on transport. Seeing this link, increasing transport prices is likely to lead to a decrease in transport demand and consequently reduced pressures on the environment. Conversely, decreases in transport prices are likely to lead to increased demand for transport. Transport pricing may thus not only be a tool to reduce the environmental pressure of transport, but also an important tool for transport demand regulation.
Internalisation of external cost, a Commission objective from the Transport White Paper (European Commission, 2001) aims to ensure users pay for the external cost generated. The Commission recently published a Communication on a strategy for the internalisation of external costs (EC, 2008a). This strategy stresses “the need for a transport pricing system that is more efficient and more accurately reflects the true costs involved”. In order to achieve this, a range of economic instruments are suggested, including taxation, tolls and CO2 emissions trading. The general principle for internalisation of external costs is ‘social marginal cost charging’, whereby transport prices should correspond to the additional short-term cost generated by one extra person using the infrastructure, ensuring fair treatment of both transport users and non-users and would create a direct link between the use if shared resources and payment on the basis of the ‘polluter-pays’ and ‘user’ pays’ principles. This same principle is expected to be used across the various modes of transport, but with varying instruments. Initially, and depending very much on the mode of transport, this will increase the costs of transport for the user, as the costs of air pollution, climate change and accidents will have to be paid for. In the longer term, the effect on transport prices is likely to be less, since pricing policies will reduce the magnitude of external effects through adaptation.
Expenditure on transport offers insight into a driver of transport demand, which may through better transport demand management contribute to a better environment.
Fair and efficient pricing across transport modes.
The sources for the expenditure group's private and public purchase of transport can be found in the National Accounts system.
National accounts are a coherent and consistent set of macroeconomic indicators, which provide an overall picture of the economic situation and are widely used for economic analysis and forecasting, policy design and policy making. Eurostat publishes annual and quarterly national accounts, annual and quarterly sector accounts as well as supply, use and input-output tables, which are each presented with associated metadata.
Annual national accounts are compiled in accordance with the European System of Accounts - ESA 1995 (Council Regulation 2223/96). Annex B of the Regulation consists of a comprehensive list of the variables to be transmitted for Community purposes within specified time limits. This transmission programme has been updated by Regulation (EC) N° 1392/2007 of the European Parliament and of the Council.
Household final consumption expenditure by consumption purposes (COICOP) for Transport (total) (CP07), Purchase of vehicles (CP071), Operation of personal transport equipment (CP072), Transport services (CP073) and Total (CP00) were collected for the EEA-32 (where available, see below), and the totals expressed as a proportion of Total (CP00).
No gap filling was used in this indicator. However, data was only used for each Member State and year when there was data for each of the four COICOP categories. This means that the Member States included varies from year to year. Member State inclusion in each year for Figure 1 is detailed in the table below. There is no gap filling for Figure 2 – only Member States for whom data for all four CIOCOP categories were available have been included.
The number of EEA-32 member states’ data used in each year of Figure 1 are (from 1990 to 2008): 12, 14, 15, 19, 19, 27, 27, 27, 28, 28, 29, 29, 29, 29, 29, 29, 27, 26, 21. Data were not available in any year for Croatia, Switzerland and Turkey.
No methodology references available.
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Work specified here requires to be completed within 1 year from now.
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For references, please go to https://www.eea.europa.eu/data-and-maps/indicators/expenditure-on-personal-mobility-2 or scan the QR code.
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