The Concise Encyclopedia of Economics
FEATURED ARTICLE

Urban Transportation

Kenneth A. Small

The defining trait of urban areas is density: of people, activities, and structures. The defining trait of urban transportation is the ability to cope with this density while moving people and goods. Density creates challenges for urban transportation because of crowding and the expense of providing infrastructure in built-up areas. It also creates certain advantages because of economies of scale: some transportation activities are cheaper when carried out in large volumes. These characteristics mean that two of the most important phenomena in urban transportation are traffic congestion and mass transit....

READ MORE
FEATURED ARTICLE

Privatization

Robert W. Poole Jr.

Privatization is an umbrella term covering several distinct types of transactions. Broadly speaking, it means the shift of some or all of the responsibility for a function from government to the private sector. The term has most commonly been applied to the divestiture, by sale or long-term lease, of a state-owned enterprise to private investors. But another major form of privatization is the granting of a long-term franchise or concession under which the private sector finances, builds, and operates a major infrastructure project. A third type of privatization involves government selecting a private entity to deliver a public service that had previously been produced in-house by public employees. This form of privatization is increasingly called outsourcing. (Other forms of privatization, not discussed here, include service shedding, vouchers, and joint ventures.)....

READ MORE
ALSO OF INTEREST

Corporate Taxation

Rob Norton

Pollution Controls

Robert W. Crandall

Health Insurance

John C. Goodman

Return to top
FEATURED BIOGRAPHY

Vernon Smith

(1927-)

In 2002, Vernon Smith and Daniel Kahneman were awarded the Nobel Prize in economics. Smith received his prize "for having established laboratory experiments as a tool in empirical analysis, especially in the study of alternative market mechanisms."

The dominant view among economists as recently as the 1970s was that economists, unlike chemists or biologists, would never be able to perform controlled experiments. Smith's work on experimental economics, which began in the mid-1950s, challenged that view. Today experimental economics is widespread and has been used to study electricity pricing, to allocate airplane landing slots, and to design auctions of operating licenses for pieces of the electromagnetic spectrum....

READ MORE