Transport finance is the subject that explores how

transport Transport (in British English), or transportation (in American English), is the intentional movement of humans, animals, and goods from one location to another. Modes of transport include air, land ( rail and road), water, cable, pipelin ...

networks are paid for. The timing of the money required to finance transport is a principal issue. Many projects are "

pay-as-you-go Pay as you go or PAYG may refer to: Finance * Pay-as-you-go tax, or pay-as-you-earn tax * Pay-as-you-go pension plan * PAYGO, the practice in the US of financing expenditures with current funds rather than borrowing * PAUG, a structured financia ...

", that is infrastructure, which lasts many years, is expected to be paid out of ongoing cash flow. Other projects are financed with bonds raised in capital markets. Bonds must be secured with an expected future cash flow. The cash flow, required for either pay-as-you-go or for bonds, must be raised. Common sources are

user fee A user fee is a fee, tax, or impost payment paid to a facility owner or operator by a facility user as a necessary condition for using the facility. People pay user fees for the use of many public services and facilities. At the federal level in ...

s, such as

gas tax A fuel tax (also known as a petrol, gasoline or gas tax, or as a fuel duty) is an excise tax imposed on the sale of fuel. In most countries the fuel tax is imposed on fuels which are intended for transportation. Fuels used to power agricultural v ...

es, and

toll Toll may refer to: Transportation * Toll (fee) a fee charged for the use of a road or waterway ** Road pricing, the modern practice of charging for road use ** Road toll (historic), the historic practice of charging for road use ** Shadow toll, ...

s. Other sources are general revenue. This issue is related to who bears the burden: users or the general public. Even if users bear the burden, that class must be subdivided, e.g. users during peak times or off-peak, freight or passenger traffic, urban or rural users, residents or non-residents (many toll plazas are located on the state line to maximize revenue from non-residents). A third issue concerns the full costs of transportation. There are monetary costs, which are financed with money, as considered above, but there are also non-monetary costs (sometimes called

hidden cost In microeconomic theory, the opportunity cost of a particular activity is the value or benefit given up by engaging in that activity, relative to engaging in an alternative activity. More effective it means if you chose one activity (for example ...

s), which are paid for by people's time, by clean air, by peace and quiet, etc. See the discussion of

externalities In economics, an externality or external cost is an indirect cost or benefit to an uninvolved third party that arises as an effect of another party's (or parties') activity. Externalities can be considered as unpriced goods involved in either co ...

for a fuller explication of non-monetary costs.

References

See also