The questions in these materials involve your interpreting the information provided by the model within your answers.

There are two options you can choose for viewing the model output. The first option shows the outcomes with graphs and gives a summary of the impact of the changes you have made. This may be the best option when you first experiment with the model. The full model output consists of a set of tables showing all the output available from the model. Each table includes the start (base) value, the end (new) value and the percentage and the absolute change.

The tables are grouped approximately as follows:

Indicators of congestion

• passenger miles per annum (million)
• vehicle miles per annum (million)
• passengers per vehicle

Indicators of costs for consumers

• average fare per passenger mile (price)

Indicators of cost / benefit analysis

• revenues
• cost / benefit appraisal

The congestion indicators imply that if the number of vehicle miles per annum falls then the level of congestion will fall.

The cost indicators illustrate the relative prices of the different modes of transport. It can be inferred that if the cost of a particular form of transport increases relative to the other transport types then a utility maximising consumer will change their consumption pattern and shift to the lower cost transport method. This can be visualised as an increase in the marginal private cost, which will shift the marginal private cost curve upwards and to the left (towards the marginal social cost curve). The extent of the shift will depend on the elasticity of demand for the form of transport.

The cost/benefit analysis illustrates wider implications for producers and government. For instance, the revenue table highlights any changes in the revenues of producers of buses and train services. It can be argued that your policies should have positive impact on the revenue of these producers to encourage an increase in supply.

The cost for commercial vehicles is of particular interest as it illustrates the likely impacts on other sectors of the economy. For instance, if the costs of operating commercial vehicles increase then individual firms are likely to pass on these higher costs through higher prices in an attempt to maintain profitability. If this occurs across all sectors associated with commercial vehicles then this may create cost-push inflationary pressure.

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